You are the accountant for Suite Dreams, a retail furniture store. Recently, an order of sofas and chairs was received from the manufacturer with terms of 3/15, n/45. The order amounted to $230,000, and Suite Dreams can borrow money at 13% ordinary interest.

How much can be saved by borrowing the funds for 30 days to take advantage of the cash discount? (Remember, Suite Dreams must borrow only the net amount due after the cash discount is taken.)

Interest= Principal x Rate x Time

I=$230,000 x .13 x 30/360
I=$2491.666
Interest= $2491.67

To calculate how much can be saved by borrowing the funds for 30 days to take advantage of the cash discount, we need to calculate the net amount due after the cash discount is taken and then calculate the interest expense for borrowing this amount.

First, let's calculate the cash discount:

The term "3/15, n/45" means that there is a 3% discount if payment is made within 15 days, otherwise the full amount is due within 45 days.

The cash discount will be 3% of the order amount, which is $230,000 multiplied by 3%:
Cash Discount = $230,000 * 0.03 = $6,900

Now, let's calculate the net amount due after the cash discount is taken:
Net Amount Due = Order Amount - Cash Discount = $230,000 - $6,900 = $223,100

Next, we need to calculate the interest expense for borrowing this net amount for 30 days. The interest rate is 13% per year, which when divided by 365 days gives us the daily interest rate:
Daily Interest Rate = 13% / 365 = 0.00035616

The interest expense for borrowing for 30 days will be:
Interest Expense = Net Amount Due * Daily Interest Rate * Number of Days
Interest Expense = $223,100 * 0.00035616 * 30 = $2,012.86

Therefore, by borrowing the funds for 30 days to take advantage of the cash discount, Suite Dreams can save $2,012.86.