Question 6: You wish to buy a product advertised with a $100 price tag. The shop gives you payment terms of 5/30 net 90. This means that if you pay

within 30 days then you can have a 5% discount (pay only $95), otherwise you must pay the full $100 price by day 90,measured from the purchase date.What is the simple interest rate per annum implicit in the discount being offered? If the bank offers 10% pa borrowing and deposit rates, should you pay the shop on day 30 or day 90?Assume 365 days in a year. All of the below answer choices are given as simple annual interest rates. The implicit simple interest rate is: (a) 5% pa, so you should pay the shop on day 30. (b) 5.2632% pa, so you should pay the shop on day 90. (c) 5.4035% pa, so you should pay the shop on day 30. (d) 20.2778% pa, so you should pay the shop on day 90. (e) 32.0175% pa, so you should pay the shop on day 30.