With terms of 4/15,net 60,what is the implied interest rate for forgoing a cash discount and paying at the end of the credit period?
A) 25.63%
B) 28.19%
C) 39.25%
D) 61.15%

Name: With terms of 4/15,net 60,what is the implied interest rate for forgoing a cash discount and paying at the end of the credit period? A) 25.63% B) 28.19% C) 39.25% D) 61.15%
Brand: Quizplus
Rating: 4.9 (46 reviews)

Question

Quizplus · Accepted Answer

EAR = [1 + (0.04 / (1 − 0.04))]^{365 / (60 − 15)} − 1 = 0.3925, or 39.25%

With Terms of 4/15,net 60,what Is the Implied Interest Rate