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Question 6 On May 1, 2020, Mike's Bikes purchases a bike from Riders Run for $500 with credit terms of 2/10, n/45, If Mike does not take advantage of the discount and instead pays on day 45, what is the rate of interest he is actually paying? Ⓒ2% O 10% © 21.3% 1/1 O 20.9%

Question 6 On May 1, 2020, Mike's Bikes purchases a bike from Riders Run for $500 with credit terms of 2/10, n/45, If Mike does not take advantage of the discount and instead pays on day 45, what is the rate of interest he is actually paying? Ⓒ2% O 10% © 21.3% 1/1 O 20.9%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Why is the answer 21.3%?

Question 6 On May 1, 2020, Mike's Bikes purchases a bike from Riders Run for $500 with credit terms of 2/10, n/45, If Mike does not take advantage of the discount and instead pays on day 45, what is the rate of interest he is actually paying? Ⓒ2% O 10% © 21.3% 1/1 O 20.9%
Transcribed Image Text:Question 6 On May 1, 2020, Mike's Bikes purchases a bike from Riders Run for $500 with credit terms of 2/10, n/45, If Mike does not take advantage of the discount and instead pays on day 45, what is the rate of interest he is actually paying? Ⓒ2% O 10% © 21.3% 1/1 O 20.9%
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