An invoice for $25,000 dated March 15 with terms 3/10, 2/20, n/30 is received in the mail on March 17. A payment of $15,000 is made on March 26. What is the outstanding balance?
A) $9,550.00
B) $9,700.00
C) $10,000.00
D) $10,300.00
E) $9,693.88

Question

Quizplus · Accepted Answer

The payment is made within the 2/20 terms (by March 26), so a 2% discount applies to the $15,000 payment. The discount is $15,000 * 0.02 = $300. Therefore, the payment reduces the balance by $15,000 - $300 = $14,700. The original invoice was $25,000, so the outstanding balance is $25,000 - $14,700 = $10,300. However, since the question asks for the outstanding balance after a payment that took advantage of the discount, the correct calculation should reflect the payment amount after the discount, leaving an error in the initial explanation. The correct outstanding balance after applying the discount correctly and subtracting from the original amount is indeed $10,300, but due to a mistake in the explanation process, the correct reasoning is that the payment of $15,000 with a 2% discount reduces the debt by more than just the face value of the payment, aiming to reflect the discount's impact accurately.

An Invoice for $25,000 Dated March 15 with Terms 3/10