If the terms are 3/15, n/45 on a credit sale, the customer will save 3% of the invoice price by paying at least 30 days before the credit period ends.

Question

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If the customer pays at least 30 days before the credit period ends, he/she will get a discount of 3% on the invoice price. This means the effective cost of the sale for the customer will be (100% - 3%) = 97% of the invoice price. Therefore, if the customer takes advantage of this discount, he/she will save 3% of the invoice price.

If the Terms Are 3/15, N/45 on a Credit Sale