Company X sells on a 1/25,net 60, basis. Customer Y buys goods with an invoice of $5,000.
A. How much can company Y deduct from the bill if it pays on day 25?
Discount $___________
B. How many extra days of credit can company Y receive if it passes up the cash discount?
Number of days _____________ days
C. What is the effective annual rate of interest if Y pays on the due date rather than day 25? ( Use 365 days in a year.
Do not round intermediate calculations. Enter your answer as a percent rounded 2 decimal places.
Effective Annual Rate _____________%