Sarah just received an invoice for $12,000 with terms of 2/10, n/30. The invoice date was June 1. Her contract with the vendor indicates a charge of 1.5 percent per month on late payments. If Sarah pays this bill on June 5, she will send the vendor a check for
A) $11,760.
B) $12,000.
C) $12,180.
D) Cannot answer without more information.

Question

Quizplus · Accepted Answer

Sarah can take advantage of a 2% discount if she pays within 10 days of the invoice date (June 1), which means paying $12,000 - 2% of $12,000. 2% of $12,000 is $240, so she would pay $12,000 - $240 = $11,760.

Sarah Just Received an Invoice for $12,000 with Terms of 2/10