On September 20 th, Hope Hardware received an invoice for 20 items at $243 each with terms 6/10, 4/20, N/30 EOM.  Hope Hardware reduced the bill by $1,970 on the last day of the first discount...

On September 20 th, Hope Hardware received an invoice for 20 items at $243 each with terms 6/10, 4/20, N/30 EOM. 

Hope Hardware reduced the bill by $1,970 on the last day of the first discount period. A cheque for $1,470 arrived on the last day of the second discount period. A payment to completely pay off the remainder of the invoice arrived on the final day before a penalty would have been incurred.

a)  What was the amount of the first payment?

b) What was the outstanding balance after the first payment was made?

$   

c) What was the amount credited for the cheque for $1,470 when it was received during the second discount period?

$   

d)  What was the amount of the last payment to pay off the invoice completely?     

$   

e)  What was the due date for the final payment? (Choose Month-Enter Date)

Asked on by olot30

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llltkl | College Teacher | (Level 3) Valedictorian

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On Sep 20, Hope hardware received an invoice for 20 items @$243 each with terms 6/10, 4/20, N/30 EOM.

Hope hardware reduced the bill by $1970 on the last day of the first discount period. A cheque for $1470 arrived on the last day of the second discount period. Finally, the complete pay off was made on the last day before which penalty would have been incurred.

The part-payments are summarized in the following table:

Date   Outstanding   Part-payment      Amount credited(= Part

                                               payment/complement of disc.)

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

Sep. 20  $(20*243)=4860    --- Invoice generated ---

Oct. 10  $4860    $x                                   $1970

Oct. 20  $2890    $1470                             $1470/0.96=$1531.25

Oct. 30 $1358.75 $1358.75

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

Therefore, ` x/0.94=1970`

`rArr x=0.94*1970=1851.80`

The answers follow:

a) The first payment was for $1851.80.

b) Outstanding balance after the first payment was made:  $2890.00

c) Amount credited for the cheque of $1470 was: $1531.25.

d) Amount of the last payment for complete pay-off without penalty was: $(2890-1531.25)=$1358.75

e) Due date for final payment: October 30.

Beyond that date, penalty may be imposed.

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