CFA® Level I Corporate Finance - Cost of Trade Credit

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[@faustothegreat6139]

The cost of trade credit done here is the formula for effective annual rate which goes as followed: ((1 + periodic rate) ^ n ) - 1
In our case for the example the periodic rate is ; discount/ 1- discount (0.015/0.985). Wrote this due to a slight confusion on my end between nominal annual cost of trade credit and effective annual rate... i'm sure others will have the same confusion.

[@lunes-1]

Great video,keep it up!🆙️

[@bandiilem201]

Perfect video.

[@ruchitaverma1646]

Very helpful!!

[@ketkikhare3778]

my ans is 14.89796% vs 15.9%.....can you explain