stion 8 of 20
5.0 Points
Merchandise lists for $5,000 with a trade discount of 10% and terms of 5/30, 3/60, n/90. If the purchaser is invoiced on April 12th and payment is made on June 10th, what is the actual amount paid?
A. $4,275
B. $4,350
C. $4,365
D. $4,500
C
To calculate the actual amount paid, we need to consider the trade discount and the terms of payment.
First, let's calculate the trade discount:
Trade discount = List price - (List price * Trade discount rate)
Trade discount = $5,000 - ($5,000 * 10%)
Trade discount = $5,000 - $500
Trade discount = $4,500
Next, let's determine the payment terms:
5/30 means a 5% discount if paid within 30 days
3/60 means a 3% discount if paid within 60 days
n/90 means the full amount is due within 90 days
Since the purchaser is invoiced on April 12th and pays on June 10th, it falls under the 3/60 term, which means a 3% discount.
Discounted amount = Trade discount * (1 - Discount rate)
Discounted amount = $4,500 * (1 - 3%)
Discounted amount = $4,500 * (1 - 0.03)
Discounted amount = $4,500 * 0.97
Discounted amount = $4,365
Therefore, the actual amount paid is $4,365.
So, the correct answer is C. $4,365.