Answer:
annual percentage cost is 10.05%
Explanation:
given data
time = 45 days
terms = 2/8
pay after A = 85 days
year y = 365 days
to find out
annual percentage cost
solution
we will calculate here effective annual percentage cost that is
annual percentage cost =( (1 + 2% / (1-2%) )^y / (A-8) -1 ......1
put here all value
annual percentage cost =( (1 + 2% / (1-2%) )^(365/(85-8)) -1
annual percentage cost =(1+0.02/ 0.98)^(365/77) -1
annual percentage cost = (1.020)^(365/77) -1
annual percentage cost = 1.10050 -1
so annual percentage cost is 10.05%
