An invoice for $2100, dated February 2, has terms 2/15, 1/30, n/90. If a $670 payment...

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

Expert Solution

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

jeff jeffy answered 1 year ago

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