An invoice for product X totals $1,200 and is dated July 6, 2000 with terms 2/10-60X. If the invoice is paid on September 3, 2000, what is the net amount of payment?
A. $912
B. $1,152
C. $1,176
D. $1,200
D
To determine the net amount of payment, we need to understand the terms provided on the invoice. In this case, the terms are "2/10-60X."
The first number in the terms, "2," represents a discount percentage. This means that if the invoice is paid within a certain number of days, the buyer can receive a discount. In this case, the discount is 2%.
The second number in the terms, "10," represents the number of days within which the buyer must pay in order to receive the discount. This means that if the invoice is paid within 10 days, the buyer can receive the 2% discount.
The final part of the terms, "60X," indicates the total number of days within which payment is due. In this case, it is 60 days. So, the buyer has 60 days to make the payment without incurring any penalty or interest charges.
Since the invoice is dated July 6, 2000, and the payment is made on September 3, 2000, we need to determine whether the payment was made within the discount period.
Calculating the number of days between July 6 and September 3, we get 59 days, which is within the 10-day discount period.
To find the net amount of payment, subtract the discount from the total invoice amount:
$1,200 - ($1,200 * 2%) = $1,200 - $24 = $1,176
Therefore, the correct answer is C. $1,176.