McCallister's just purchased $16,600 worth of inventory. The terms of the sale were 2/10, net 40....

Question

Question

McCallister's just purchased $16,600 worth of inventory. The terms of the sale were 2/10, net 40. What is the implicit interest?

Answer 1

Answer #1


Discount to be withdrawn= 2 (i.e. interest )
On amount to be paid = 100-2 = 98
period of additional credit allowed = 40-10 = 30

Implicit rate of interest = 2/ 98 * 365/30 =24.83%

Answer is 24.83%

Answer 2

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