A Merchant Receives an Invoice for $8000 with Terms 2/10,n/50

question 70

Multiple Choice

A merchant receives an invoice for $8000 with terms 2/10,n/50.What is the maximum interest rate that the merchant could borrow money at to take advantage of the discount?

• A)18.62%
• B)18.25%
• C)14.90%
• D)14.60%

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Definitions:

Express Contract

An agreement with clear, explicit terms that are communicated verbally or in writing between parties.

Implied Contract

A contract that arises not from words of agreement but from the conduct of the parties.

Executory Contract

An executory contract is a contract that has not yet been fully performed or completed by one or more parties.

Agreed Upon

A condition or decision reached by two or more parties after a negotiation or discussion.