kool kozmetics a supplier normal credit terms are 60 days ho

kool kozmetics a supplier normal credit terms are 60 days. however they have offered Body Shop their customer a 6 % rebate if the customer pays off it\'s account within 20 days. determine the percentage cost to Body Shop of not accepting the discount from the supplier.

Solution

(Discount% / (100% – Discount%)) * (365 / (total pay period – discount period))

(6%/(100%-6%))*(365/((60-20))

=58.24%