A store receive an invoice for $1773.75 dated January 23 with terms 3/10, 1.5/25, n/45.
a) What is the balance after a payment of $1250 on Februray 2?
1250/(1-.03)=1288.66
1288.66-1773.75=485.09
Answer for (a)$485.09
b) What additional payment on February 17 will settle the invoice?
1250/(1-.015)=1269.04
1269.04 + 485.09=1754.13
1754.13-1773.75=19.62
Answer for (b)$19.62
To get the answer to part (a), we need to calculate the balance after a payment of $1250 on February 2.
Step 1: Calculate the amount before the discount.
The invoice is $1773.75, and the terms are 3/10. This means that if the payment is made within 10 days, there is a 3% discount.
$1773.75/(1 - 0.03) = $1826.80
Step 2: Calculate the balance after the payment.
Subtract the payment of $1250 from the amount before the discount.
$1826.80 - $1250 = $576.80
Therefore, the balance after a payment of $1250 on February 2 is $576.80.
To get the answer to part (b), we need to calculate the additional payment on February 17 that will settle the invoice.
Step 1: Calculate the amount before the discount.
The balance after the payment on February 2 is $576.80, and the terms are 1.5/25. This means that if the payment is made within 25 days, there is a 1.5% discount.
$576.80/(1 - 0.015) = $586.96
Step 2: Calculate the total payment required to settle the invoice.
Add the balance after the February 2 payment to the amount before the discount.
$586.96 + $576.80 = $1163.76
Step 3: Calculate the additional payment needed to settle the invoice.
Subtract the total required payment from the original invoice amount.
$1773.75 - $1163.76 = $609.99
Therefore, the additional payment needed on February 17 to settle the invoice is $609.99.