Question

Each of the following situations involves the use of discounts:

1.        How much discount may Seals Inc. take in each of the following transactions? What was the annualized interest rate?

a.      Seals purchases inventory costing $450, terms 2/10, n/40.

b.      Seals purchases new office furniture costing $1,500, terms 1/10, n/30.

2.        Calculate the discount rate that Croft Co. received in each of these transactions.

a.      Croft purchased office supplies costing $200 and paid within the discount period with a check for $196.

b.      Croft purchased merchandise for $2,800. It paid within the discount period with a check for $2,674.

 

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Answer 1

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Explanation:

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