An invoice for $9,000 dated September 1 with terms 2/10, 1½/20, n/30 is received in the mail on September 3. The company sent a cheque on September 12 for $5,000. What is their outstanding balance?
A) $4,000.00
B) $3,897.96
C) $3,900.00
D) $3,925.00
E) $3,923.86

Question

Quizplus · Accepted Answer

The company paid $5,000 on September 12, which is within the 10-day period to receive a 2% discount. The discount on $5,000 is $100, so they effectively paid $4,900. The remaining balance is $9,000 - $4,900 = $4,100. The remaining $4,100 is eligible for a 1.5% discount if paid within 20 days. The discount on $4,100 is $61.50, so the outstanding balance is $4,100 - $61.50 = $3,923.86.

An Invoice for $9,000 Dated September 1 with Terms 2/10