An invoice for $7,000 dated September 1 with terms 2/10, 1½/20, n/30 is received in the mail on September 3. If the company wants to reduce the outstanding balance to $4,000, how much should they pay on September 12?
A) $3,000
B) $2,940
C) $2,955
D) $3,920
E) $3,940

Question

Quizplus · Accepted Answer

The terms 2/10 mean a 2% discount is available if paid within 10 days. To reduce the balance to $4,000, the company should pay $3,000. With a 2% discount, they pay 98% of $3,000, which is $2,940. However, the correct calculation involves the remaining balance after the discount, leading to $2,955.

An Invoice for $7,000 Dated September 1 with Terms 2/10