Jasper Inc. has credit terms of 2/10 net 60. Customers should take the discount and pay in 10 days if they CANNOT earn more than ________ (APR) or ________ (EAR) on their investments
A) 14.90% APR or 15.89% EAR
B) 15.89% APR or 14.90% EAR
C) 12.42% APR or 13.08% EAR
D) 13.08% APR or 12.42% EAR
Answer: A
Explanation: A) APR = × = × = 14.90%.
EAR = - 1 = -1 = 15.89%.
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