Assume you skip the discount and pay at the end of the net period for the...

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Assume you skip the discount and pay at the end of the net period for the...

Assume you skip the discount and pay at the end of the net period for the following credit terms: 1/10, net 32. Calculate the APY for the trade credit. (Enter your answer as a decimal accurate to four decimal places)

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Answer 1

Answer #1

APY = [1 + (Disc.%/100 - Disc.%)]^[365 / (Days Credit Outstanding – Discount Period)] - 1

APY = [1 + (1/99)]^[365 / (32 - 10)] - 1

APY = 0.1815

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Answer 2

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