On June 22, Roy's Welding Shop purchased $2,618 worth of goods.The terms of the sale were 2/15, net 45.What is the effective annual rate of interest for the credit period for this sale?

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The effective annual rate of interest for the credit period for this sale is 27.86 percent.The discount period is 15 days, and the net period is 45 days. The discount rate is 2%.The effective annual rate of interest is calculated as follows:EAR = (1 - DR/100)^365/ND - 1where:EAR = effective annual rate of interestDR = discount rateND = net periodEAR = (1 - 2/100)^365/45 - 1EAR = 0.2786 or 27.86%

On June 22, Roy's Welding Shop Purchased $2,618 Worth of Goods.The