On April 14, Dominic's purchased $7,800 worth of inventory.The terms of sale were 1.5/10, net 30.The implicit interest is _____ and the effective annual rate is _____ percent.

Question

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The implicit interest is the discount lost by not paying within the discount period, which is $117 ($7,800 * 1.5%). The effective annual rate is calculated based on the discount period and the net period, resulting in 31.76%.

On April 14, Dominic's Purchased $7,800 Worth of Inventory