An invoice for $2,500 dated September 15 with terms 2/10, 1½/20, n/30, EOM is received in the mail on September 18. What payment will settle the invoice on October 11?
A) $2,450.00
B) $2,500.00
C) $2,200.00
D) $2,462.50
E) $2,125.00

Question

Quizplus · Accepted Answer

The terms 2/10, 1½/20, n/30, EOM indicate that a 2% discount is available if paid within 10 days, a 1.5% discount if paid within 20 days, and the net amount is due within 30 days, all calculated from the end of the month (EOM) of the invoice date. Since the invoice is dated September 15, the EOM is September 30. Therefore, October 11 is within the 1½/20 discount period. The payment, with a 1.5% discount on $2,500, is $2,500 - ($2,500 * 0.015) = $2,500 - $37.50 = $2,462.50.

An Invoice for $2,500 Dated September 15 with Terms 2/10