Ned’s Sheds purchases building materials from Timbertown Lumber for $3,700 with terms of 4/15, n/30. The invoice is dated October 17. Ned’s decides to send in a $2,000 partial payment. By what date must the partial payment be sent to take advantage of the cash discount?
Considering the scenario from the previous question, if partial payment was sent by the discount date, what is the balance still due on the order?
I don't understand
To determine the date by which the partial payment must be sent to take advantage of the cash discount, we need to look at the terms specified in the invoice.
The terms "4/15, n/30" indicate that there is a cash discount of 4% available if the payment is made within 15 days. If the payment is not made within the discount period, the full amount is due within 30 days.
Let's calculate the discount period start date:
1. Start with the invoice date: October 17.
2. Add the number of days within the discount period: 15 days.
October 17 + 15 days = November 1.
Therefore, the partial payment must be sent on or before November 1 to take advantage of the cash discount.
Now, let's calculate the balance still due on the order if the partial payment of $2,000 is sent by the discount date.
1. Start with the total purchase amount: $3,700.
2. Subtract the partial payment: $3,700 - $2,000 = $1,700.
Therefore, if the partial payment of $2,000 is sent by the discount date, the balance still due on the order would be $1,700.