Slipshod Machine Tool Co.owes $40,000 to one of its suppliers.The supplier has offered a trade discount of 2/10 net 30.Slipshod can borrow the funds from either of two banks.First City Bank will loan the funds for 20 days at a cost of $400.Upstart Bank offers a discounted loan for 20 days at a cost of $320.
A)What is the cost of failing to take the discount?
B)What is the annual interest rate on each of the loans?
C)Which alternative should Slipshod follow?

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The Answer of Slipshod Machine Tool Co.owes $40,000 to one of its suppliers.The supplier has offered a trade discount of 2/10 net 30.Slipshod can borrow the funds from either of two banks.First City Bank will loan the funds for 20 days at a cost of $400.Upstart Bank offers a discounted loan for 20 days at a cost of $320.