Annual interest paid = (365 ÷ Number of extra days) × Discou…

Annual interest paid = (365 ÷ Number of extra days) × Discount amount; Annual interest rate = Annual interest paid ÷ Amount borrowed. Sunshine Clinic purchases a piece of equipment for $250 with a 2–15, net 30 provision. What is the effective annual interest rate if the clinic pays on day 16? On day 30?

Future value = PV(1 + i/m)^(mn), where i is the annual inter…

Future value = PV(1 + i/m)^(mn), where i is the annual interest rate, m is the number of times compounded per year, and n is the number of years. ABC Physical Therapy Clinic wants to invest $500,000. What is the future value of the investment compounded semiannually at 9 percent for ten years?