What payment should be made on an invoice in the amount of $3400 dated August 7 if the terms of the sale are 3/15,2/30,n/45 and the bill is paid on August 19 and September 3
To determine the payment amount on an invoice with given terms, we need to follow these steps:
Step 1: Understand the terms:
The terms of the sale are given as 3/15, 2/30, n/45. This breakdown implies that if the invoice is paid within 3 days, there will be a 3% discount. If paid within 15 days, there will be no discount. If paid between 16 and 30 days, there will be a 2% discount, and if paid beyond 30 days, the full amount is due.
Step 2: Calculate the due dates:
From the information provided, the invoice is dated August 7, and two payment dates are given: August 19 and September 3. By counting the number of days between these dates and the invoice date, we can determine the number of days that pass for each payment date.
August 19:
Days between August 7 and August 19 = 12 days
September 3:
Days between August 7 and September 3 = 27 days
Step 3: Determine the payment amount:
Based on the due dates calculated in step 2, we can determine which discount applies to each payment date.
August 19 (12 days after invoice date):
Since the payment is made within 3 days, the maximum discount of 3% applies. To calculate the payment amount, we deduct the discount from the invoice amount:
Discount = Invoice amount x (Discount rate / 100) = $3400 x (3 / 100) = $102
Payment amount = Invoice amount - Discount = $3400 - $102 = $3298
September 3 (27 days after invoice date):
Since the payment is made between 16 and 30 days, a 2% discount applies. To calculate the payment amount, we deduct the discount from the invoice amount:
Discount = Invoice amount x (Discount rate / 100) = $3400 x (2 / 100) = $68
Payment amount = Invoice amount - Discount = $3400 - $68 = $3332
Therefore, the payment to be made on the invoice of $3400 dated August 7, with the given terms and payment dates, would be $3298 on August 19 and $3332 on September 3.