Question

You are a store manager for a large retail chain. Your store spent $23,500 to purchase new cash registers on April 20, with terms of sale of 4/10, 2.5/30, n/60. You made a partial payment of $10,000 on May 1.

What is the net amount due?

Answer 1

New register of amount $ 23,500 purchased on April 20th

the terms of sale are:-

- 4% discount if paid with 10 days of invoice date

- 2.5% discount if paid with 30 days of invoice date

- if not paid with above terms, then pay with 60 days but no discount.

As you made partial payment on 1st of May and since the payment is made after 10 days you will recieve only 2.5% discount

Payment made after discount = $10,000

Payment before discount = Payment /(1-Discount rate)

= 10,000/(1-0.025)

= $ 10256.41

So, actual partial payment made is $ 10,256.41

Net Amount due = $ 23,000 - $ 10,256.41

= $ 12,743.59

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