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The terms of the sale were 3/12, net 41. What is the nominal rate? That is,...

The terms of the sale were 3/12, net 41. What is the nominal rate? That is, compute the APR.

Convert your answer to percentage and round off to two decimal points. Do not enter % in the answer box.

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Answer #1

3/12 net 41 means if the debt is paid in 12 days, eligible for 3% discount. Actual allowed credit period is 41.

Thus to save 3%, we need to pay 29 days ahead.

APR = Int Rate * 365 / No. of days

= 3% * 365 / 29

= 37.76%

APR is 37.76%

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