Suppose You Purchase Goods on Terms of 3/10, Net 60

question 9

Multiple Choice

Suppose you purchase goods on terms of 3/10, net 60. Taking compounding into account, what annual rate of interest is implied by the cash discount? (Assume a year has 365 days.)

• A) 32%
• B) 5%
• C) 91%
• D) 28.2%

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Definitions:

Quality Education

An education that provides learners with the knowledge, skills, values, and attitudes necessary to lead productive lives and positively contribute to society.

Heterogeneous Population

A diverse group of individuals differing in various attributes such as age, gender, ethnicity, or socioeconomic status.

Alcoholism

A chronic disease characterized by uncontrolled drinking and a preoccupation with alcohol.

Implicit Marginal Tax Rate

The rate at which additional income is taxed, including the loss of government benefits or subsidies as income rises.