Company X sells on a 2/15, net 90, basis

Finance Oct 09, 2020

Company X sells on a 2/15, net 90, basis. Company Y buys goods with an invoice of $1,000.

a. How much can company Y deduct from the bill if it pays on day 15? (Do not round intermediate calculations.)

b. How many extra days of credit can company Y receive if it passes up the cash discount?

c. What is the effective annual rate of interest if Y pays on the due date rather than day 15? (Use 365 days in a year. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)

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