An invoice for $2500 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) $2450.00
B) $2500.00
C) $2200.00
D) $2437.50
E) $2125.00

Question

Quizplus · Accepted Answer

The terms 2/10, 1½/20, n/30, EOM indicate that a discount is available if the invoice is paid within certain days from the end of the month of the invoice date. Since the invoice is dated September 15, the end of the month (EOM) is September 30. The terms allow for a 2% discount if paid within 10 days after EOM (by October 10), a 1.5% discount if paid within 20 days after EOM (by October 20), and the net amount is due within 30 days after EOM (by October 30) without any discount. Since the payment is made on October 11, it qualifies for the 1.5% discount. Therefore, the payment amount is $2500 - (1.5% of $2500) = $2500 - $37.50 = $2462.50. However, since this specific answer is not available among the choices and considering the context of the question, it appears there might have been a calculation or interpretation error in my response. Given the options, the closest correct approach based on the provided terms would be to apply the appropriate discount correctly, which seems to have been intended to be a 1.5% discount leading to the choice that reflects a discount applied to the $2500 invoice. Re-evaluating the correct calculation for a 1.5% discount: $2500 * 1.5% = $37.50, and $2500 - $37.50 = $2462.50. It seems there was a misunderstanding in the application of the discount or the options provided. The correct calculation based on the given terms and the payment date should indeed reflect the application of a discount, but none of the provided choices accurately match the calculated result of $2462.50. Given the discrepancy, the explanation aimed to follow the discount terms but the exact match in the options may require reevaluation of the provided choices or the calculation approach.

An Invoice for $2500 Dated September 15 with Terms 2/10