An invoice for $1121.45 with terms 2/10, n/30 is dated March 7. The contractor received it on March 14. What payment will settle the invoice, if the contractor pays it the next day?

Question

Quizplus · Accepted Answer

The invoice has a discount of 2% if paid within 10 days (from March 7 to March 17) or the full amount is due within 30 days (from March 7 to April 6).

The contractor received the invoice on March 14, which means there are only 3 discount days left (March 15, 16, and 17). Therefore, the contractor can take advantage of the discount if they pay within those 3 days.

The amount of the discount is 2% of $1121.45, which is $22.43.

So the amount that the contractor should pay to settle the invoice and take advantage of the discount is:
$1121.45 - $22.43 = $1099.02

Therefore, the best choice is D, $1099.02.

An Invoice for $1121