# Calculating the effective annual rate in the given case.

A firm sells its $1,180,000 receivables to a factor for $1,132,800. The average collection period is 1 month. What is the effective annual rate on this arrangement? (Round your intermediate calculations to 4 decimal places. Round your answer to 2 decimal places.)

Effective annual rate = _______________ %

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#### Solution Summary

The solution describes the steps to calculate the effective annual rate in the given case.

$2.19