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Sports Center received a cheque for $2,612.25 in partial payment of an invoice owed by...

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mavilovesyou | eNotes Newbie

Posted November 5, 2013 at 4:23 PM via web

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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.

Round your final answer properly to two decimal places.

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

$  ____________ 

b)  How much does The Ski Shop still owe?

$  ____________  


1 Answer | Add Yours

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llltkl | College Teacher | (Level 3) Valedictorian

Posted November 5, 2013 at 7:27 PM (Answer #2)

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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

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