If you elect to not take a discount on trade credit, the effective interest rate on the funds thus obtained _ as the time you take to pay increases.

Name: If you elect to not take a discount on trade credit, the effective interest rate on the funds thus obtained _ as the time you take to pay increases.
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Question

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The effective interest rate falls as the time to pay increases because the cost of not taking the discount is spread over a longer period, reducing the annualized interest rate.

If You Elect to Not Take a Discount on Trade