Problem 5-88A (Algorithmic) Sales Discounts (Appendix 5A)

Sims Company regularly sells merchandise to Lauber Supply on terms 2/15, n/30 and records sales at gross. During a recent month, the two firms engaged in the following transactions:

1. Sims sold merchandise with a list price of $34,300.
2. Sims sold merchandise with a list price of $48,000.
3. Lauber paid for the purchase in Transaction a within the discount period.
4. Lauber paid for the purchase in Transaction b after the discount period.

Required:

4. Conceptual Connection: What implied annual interest rate is Lauber incurring by failing to take the sales discount and, instead, paying the gross amount after 30 days? Assume a 365 day year and round the percentage to one decimal. %