# Sports Center received a cheque for \$2,612.25 in partial payment of an invoice owed by the Ski Shop.  The invoice was for \$6,849 with terms 4 / 20, E.O.M.  dated September 15, and the cheque was...

Sports Center received a cheque for \$2,612.25 in partial payment of an invoice owed by the Ski Shop.  The invoice was for \$6,849 with terms 4 / 20, E.O.M.  dated September 15, and the cheque was received October 18.

a)  By how much should Sports Center credit the account of The Ski Shop?

\$  ____________

b)  How much does The Ski Shop still owe?

\$  ____________

llltkl | College Teacher | (Level 3) Valedictorian

Posted on

The invoice was for \$6,849 with terms 4 / 20, E.O.M.  dated September 15, and the cheque was received on October 18. Hence, the amount is eligible for a 4% discount.

The discounted amount on that date for total payment is \$(6849-0.04*6849)=\$6575.04

But, Ski Shop made a part payment of \$2612.25.

a) The real value accrued out of this payment should thus be

=6849*2612.25/6575.04

=\$2721.094

=\$2721.09

b) The amount still owed by Ski Shop is = \$(6849-2721.09)

=\$4127.91