(Annual percentage yield) Compute the cost of the following trade credit terms using the compounding formula, or effective annual rate. Note: Assume a 30-day month and 360-day year. a. 2/5, net 60 b. 2/10, net 45 c. 3/15, net 75 d. 2/10, net 45 a. When payment is made on the net due date, the APR of the credit terms of The EAR of the credit terms of 2/5, net 60 is %. (Round to two decimal places.) C net 60 is 13.36 %. (Round to two decimal places.)
(Annual percentage yield) Compute the cost of the following trade credit terms using the compounding formula, or effective annual rate. Note: Assume a 30-day month and 360-day year. a. 2/5, net 60 b. 2/10, net 45 c. 3/15, net 75 d. 2/10, net 45 a. When payment is made on the net due date, the APR of the credit terms of The EAR of the credit terms of 2/5, net 60 is %. (Round to two decimal places.) C net 60 is 13.36 %. (Round to two decimal places.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
EAR=(1+i/m)m-1
(1+0.1336)360/55-1=
360/55
Is This correct? If so I' having trouble taking (7.5455)360/55.
Thanks
![**(Annual percentage yield)** Compute the cost of the following trade credit terms using the compounding formula or effective annual rate.
*Note*: Assume a 30-day month and 360-day year.
a. 2/5, net 60
b. 2/10, net 45
c. 3/15, net 75
d. 2/10, net 45
---
a. When payment is made on the net due date, the **APR** of the credit terms of 2/5, net 60 is **13.36%**. (Round to two decimal places.)
The **EAR** of the credit terms of 2/5, net 60 is [input box]%. (Round to two decimal places.)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff0fc3d30-4939-4166-86b5-591ca635fe70%2F508d9180-0016-498b-829f-02da0fc653a2%2Fut6x0j_processed.png&w=3840&q=75)
Transcribed Image Text:**(Annual percentage yield)** Compute the cost of the following trade credit terms using the compounding formula or effective annual rate.
*Note*: Assume a 30-day month and 360-day year.
a. 2/5, net 60
b. 2/10, net 45
c. 3/15, net 75
d. 2/10, net 45
---
a. When payment is made on the net due date, the **APR** of the credit terms of 2/5, net 60 is **13.36%**. (Round to two decimal places.)
The **EAR** of the credit terms of 2/5, net 60 is [input box]%. (Round to two decimal places.)
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