Suppose you are offered trade credit terms of 1.5/15, net 50. What would be the APR...
Suppose you are offered trade credit terms of 1.5/15, net 50. What would be the APR cost if you "stretched" the payables and paid after 65 days? (Enter your answer as a decimal accurate to four decimal places)
Homework Answers
APR = (Discount% / [100% – Discount%])(365 / [Total period – Discount period])
APR = (1.5/98.5) × [365 / (65 - 15)]
APR = 11.12%
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Suppose you are offered trade credit terms of 1.5/15, net 50.
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