Shoreline Supply offers their customers trade credit with terms 2/15 net 30. This implies that

Question

Quizplus · Accepted Answer

The terms state that Shoreline Supply will allow a 2 percent discount if a customer pays within 15 days. If the customer does not pay during the 15-day discount period, the entire amount is due within 30 days of the invoice date. Thus, the customer pays 2% more for waiting for 15 additional days before making payment. Using the computational method described in the text, there are approximately 24 15-day periods in a year, so the annual rate is 2% per period x 24 periods = 48%.

Shoreline Supply Offers Their Customers Trade Credit with Terms 2/15