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An invoice dated March 17, 1999 for $8,150 was received by your company. The terms...

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loveaajkhal | eNotes Newbie

Posted November 5, 2013 at 4:35 PM via web

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An invoice dated March 17, 1999 for $8,150 was received by your company. The terms of the invoice are 3/10, 1.5/20, n/30, EOM.

Partial payments are made as indicated below.  Enter the missing partial payment on April 20, rounded properly to two decimal places, if the balance on April 24 was $845.

April 1 $2,445 April 12 $2,760 April 20 $____________ 

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llltkl | College Teacher | (Level 3) Valedictorian

Posted November 5, 2013 at 7:01 PM (Answer #2)

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The invoice has terms of 3/10, 1.5/20, n/30 E.O.M. This means the entire balance is due within 30 days after the end of the month in which the invoice is issued, but the buyer can take a 3% cash discount if the bill is paid within 10 days and a 1.5% discount if the bill is paid within 20 days after the end of the month in which the invoice is issued.

Total amount in the invoice dated Mar. 17, 1999 was $8150.

Date  Outstanding  Payment made   Discount    Accrued payment  

--------  ----------------  ----------------   --------  -----------------  

Apr. 1      $8150.00            $2445            3%     $2520.62

Apr. 12   $5629.38             $2760           1.5%   $2802.03

Apr. 20   $2827.35               x                 1.5%     

--------------------------------------------------------------------------

Amount outstanding on Apr. 24 is $845.

Therefore, `2827.35(1-x/2784.94)=845`

`rArr 2784.94-x=845*2784.94/2827.35`

`rArr x=2784.94-832.32=1952.62`

So, payment made on Apr. 20 was of $1952.62.

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