Question

A firm offers terms of 2/15, net 60.

What effective annual interest rate does the firm earn when a customer does not take the discount?

What effective annual interest rate does the firm earn if the discount is changed to 3 percent?

What effective annual interest rate does the firm earn if the credit period is increased to 80 days?

What effective annual interest rate does the firm earn if the discount period is increased to 20 days?