A firm offered 3/10, net 30 as terms of trade credit on a $1,000 invoice dated January 1.How much must the purchaser offer to pay in full on January 4th?
A)$970.00
B)$971.16
C)$1,000.00
D)$1,030.00

Question

Quizplus · Accepted Answer

The terms 3/10, net 30 mean that the purchaser can take a 3% discount if the invoice is paid within 10 days; otherwise, the full amount is due in 30 days. Since the payment is being made on January 4th, which is within the 10-day discount period, the purchaser can pay 97% of the $1,000 invoice, which is $1,000 * 0.97 = $970.00.

A Firm Offered 3/10, Net 30 as Terms of Trade