In: Finance
An invoice for $2100, dated February 2, has terms 2/15, 1/30, n/90. If a $670 payment was made on February 15, what payment on March 1st will settle the account? Calculate your answer in dollars to two decimal places. Do not enter the $ sign
The terms 2/15, 1/30, n/90 means that the invoice should be settled in 90 days and if settled in | |||
15 days is entitled for a discount of 2% and if settled in 30 days in entitled for a discount of 1%. | |||
Therefore, $670 payment made is after discount of 2% as it was made within 15 days. | |||
The invoice value of $670 = $670/98% | |||
= $683.67 | |||
Remaining amount to be settled = $2700-$683.67 | |||
= $2016.33 | |||
Amount settled on March 1st is entitled for a discount of 1%, | |||
Therefore, | |||
Payment on March 1st = $2016.33 * 99% | |||
= $1996.16 |