The net price equivalent rate of 3/7/13 is:
A)0.0273
B)0.784827
C)0.488173
D)215173
E)None of these

Question

Quizplus · Accepted Answer

To calculate the net price equivalent rate, we use the formula: 
Net Price Equivalent Rate = 1 - [(100 - Discount %)/100]^[365/Number of Days between Payment and Discount Date]
Here, the discount date is 3/7/13, which means that the time between the invoice date and the discount date is 4 months (30 days in April, 31 days in May, 30 days in June, and 3 days in July). So, the number of days is 122. 
The discount % is 3. 
So, Net Price Equivalent Rate = 1 - [(100 - 3)/100]^[365/122] = 0.784827
Therefore, the answer is B.

The Net Price Equivalent Rate of 3/7/13 Is