Sarah just received an invoice for $12,000 with terms of 2/10,n/30.The invoice date was June 1.Her contract with the vendor indicates a charge of 1.5 percent per month on late payments.If Sarah pays this bill on July 15 she will send the vendor a check for
A)$12,000.
B)$11,760.
C)$12,180.
D)Cannot answer without more information.

Question

Quizplus · Accepted Answer

If Sarah pays the invoice within 10 days of the invoice date, she can take a 2 percent discount on the invoice total. Therefore, the discounted amount that Sarah would owe if she paid within 10 days is:
$12,000 x 0.98 = $11,760

If Sarah chooses not to take advantage of the discount and pays the full amount on July 15 (44 days after the invoice date), the amount she owes will include a late fee of 1.5 percent per month for 1.5 months (June and July). Therefore, the total amount Sarah would owe if she pays on July 15 is:
$12,000 + ($12,000 x 0.015 x 1.5) = $12,180

Therefore, the best choice is C, as it represents the total amount Sarah will owe if she pays the invoice on July 15 without taking advantage of the discount.

Sarah Just Received an Invoice for $12,000 with Terms of 2/10,n/30.The