Neco Model Questions Vol1 2024 Commerce Question 23
Practice objective / multiple choice question 23 from the 2024 Neco Model Questions Vol1 Commerce examination.
A supplier issues an invoice for ₦850,000 payable within 30 days. The buyer pays the invoice 45 days after the invoice date. The contract states that a penalty of 2 % per month (simple interest) is charged on the overdue amount, calculated on a 30‑day month basis. The buyer also missed a 1.5 % cash‑discount that would have applied if payment had been made within the original 30 days. Calculate (a) the total amount the buyer must now pay, including the penalty, (b) the effective annual interest rate represented by the penalty, and (c) the extra cost incurred because of the delay (penalty plus lost discount).
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About This Question
This is Neco Model Questions Vol1 2024 Commerce Question 23. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Commerce examination.
Difficulty level: Hard .
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