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 July 15, 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

Since Sarah pays after the discount period (2/10, n/30) but within 30 days, she misses the discount but avoids the late fee. However, she pays on July 15, which is 15 days past the net 30 days term, incurring a 1.5% late fee on $12,000. The late fee is $180 (1.5% of $12,000), making the total payment $12,180.

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