B$16$

$f_x$

$=(B\frac{6}{1-B6})**(\frac{365}{B8-B7})$

A

B

C

D

E

F

G

$1$

Bill Norman comes to you for advice. He has just purchased a large amount of inventory with the terms $2/10,\frac{n}{30}.$ The amount of the invoice is $$310,000.$ He is currently short of cash but has decent credit. He can borrow $3$ the money needed to settle the account payable at an annual interest rate of $7$ percent. Bill is sure he will have

$4$ the necessary cash by the due date of the invoice but not by the last day of the discount period.

$5q,$

$11$

$12$ Required:

$13$ a$.$ Convert the discount rate into an annual interest rate.

$14$ b$.$ Make a recommendation regarding whether Bill should borrow the money and pay off the account payable within the discount pe

$15$

$16$ a$.$ Annual rate

$17$

b$.$ Should Bill borrow the money and pay off the account payable within the discount period?

$$

$=(B\frac{6}{1-B6})**(\frac{365}{B8-B7})$

$18q,$

Yes

$19$

$20$