Answer Happy

Assume that NetSolutions places an order from Alpha Technologies on January 5 with terms of 2/10, n/30. In order to pay the invoice on January 15 (the last day of the discount period), NetSolutions borrows $2,940, which is $3,000 less the discount of $60 ($3,000 × 2%). If an annual interest rate of 6% and a 360-day year is assumed, the interest on the loan of $2,940 for the remaining 20 days of the credit period is $9.80 ($2,940 × 6% × 20 ÷ 360). Show the savings Net Solutions gains by taking the discount. Consider the cost to Net Solutions of borrowing the money to pay the invoice. What happens if Net Solutions does not take the discount? What is the cost to Net Solutions?