A firm grants trade credit with terms of 3/20,net 60.What effective annual rate (EAR) does a buyer pay by not taking the discount? If the buyer can borrow funds from a bank at 21% per annum,should the account be settled within 20 days?
A) 22.04%;yes
B) 16.83%;no
C) 32.04%;yes
D) 16.83%;yes
E) 28.51%;yes
Correct Answer:
Verified
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