t purchased new goods worth 100,000 EUR from your supplier. Your supplier offers you to pay within 35 days. If you pay within the first 8 days, you get a discount of 1.2%. When would you pay? Why? What is the effective interest rate? Under whi

Personal Finance
13th Edition
ISBN:9781337669214
Author:GARMAN
Publisher:GARMAN
Chapter7: Credit Cards And Consumer Loans
Section: Chapter Questions
Problem 2LTAI
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  1. You have just purchased new goods worth 100,000 EUR from your supplier. Your supplier offers you to pay within 35 days. If you pay within the first 8 days, you get a discount of 1.2%. When would you pay? Why? What is the effective interest rate? Under which circumstances would you take the trade credit?
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