On April 14, Robertsons's purchased $10,200 worth of inventory.The terms of sale were 3/10, net 30.The implicit interest is _____ and the effective annual rate is _____ percent.
A)$300; 14.95
B)$306; 74.35
C)$306; 25.65
D)$300; 25.65
E)$400; 44.59

Question

Quizplus · Accepted Answer

The implicit interest is the discount lost by not paying within the discount period, which is $306 (3% of $10,200). The effective annual rate is calculated based on the discount period and the net period, resulting in 74.35%.

On April 14, Robertsons's Purchased $10,200 Worth of Inventory