own Inc has received an invoice of 2780 dated August 18 term

own Inc. has received an invoice of $2780 dated August 18, terms 2/10, n/60. What rate questionst are not interrelated). (6 marks) a. by $1,000- Account is reduced by $1,000 b. to $1,000 - Balance owed is $1,000

Solution

Explanation:

Aug. 28 is in 10 days period from Aug. 18.

2% discount should be applied to the payment made.

a. When we try to pay $1000 , we can get 2% discount on it. So we only need to pay 1000(1 0.02) = $980 and the invoice will be reduced by $1000.

b. If we try to have invoiced reduced to $1000. It means that we have to pay 2780 – 1000 = $1780. Because of the 2% discount, we only need to pay 1780(1 0.02) = $1744.40