Peter buys consignment of doll houses worth $30 000. Shop offers terms of 2/10 net 60. How much can he borrow from his bank overdraft at 16% interest if there is 365 days in a year take the discount or not.
Take Discount as cost of discount is 12%
Take discount as cost of discount is 15%
Do not take the discount as cost of discount is 12%
Do not take the discount as cost of discount is 15%
Based on the given data, the effective rate of interest can be calculated using the given discount terms;
The effective rate of interest by using discount is coming to 15%, and is lower than that of the bank overdraft;
Hence, the answer is: Take discount as cost of discount is 15%
Get Answers For Free
Most questions answered within 1 hours.