Fred's Factory has credit sales of $747,500 and an average accounts receivable balance of $57,500. Fred factors his receivables throughout the year with his local bank at a 2% discount. What is the effective annual rate of this arrangement?

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The Answer of Fred's Factory has credit sales of $747,500 and an average accounts receivable balance of $57,500. Fred factors his receivables throughout the year with his local bank at a 2% discount. What is the effective annual rate of this arrangement?

Fred's Factory Has Credit Sales of $747,500 and an Average