The D.J. Masson Corporation needs to raise $500000 for 1 yearto supply working capital to a new store. Masson buys from itssuppliers on terms of 3/10 net 90 and it currently pays on the10th day and takes discounts. However it could forgo thediscounts pay on the 90th day and thereby obtain the needed$500000 in the form of costly trade credit. What is the effectiveannual interest rate of this trade credit?
Back