Discount Question: Balance Due After Partial Payments

[Simon T]

A merchant received an invoice for \$7000 with credit terms of 7/10, 4/20, n/30 dated January 4. Partial payments were made as follows: \$2790 on January 12, and \$1920 on January 21. Determine the balance due at the end of the month.can someone fix the format of my question? its not showing up properly

 

[Greg]

Hi cyrus23 and welcome to MHB! :D

can someone fix the format of my question? its not showing up properly

I've edited your post so it renders correctly. Dollar signs have a special meaning on this forum - they are used for typesetting math (latex). If you precede each dollar sign with a \ you won't have a problem.

Also, we ask that our users show their progress (work thus far or thoughts on how to begin) when posting questions. This way our helpers can see where you are stuck or may be going astray and will be able to post the best help possible without potentially making a suggestion which you have already tried, which would waste your time and that of the helper.

Can you post what you have done so far?

 

[Simon T]

thank you! well I am pretty sure I am doing it wrong because I am not sure how to do this question but this is what i have so far

2790 (1-7)
2790 (0.93)
2594.7

1920 (1-4)
1920 (0.96)
1843.2

 

[Simon T]

can someone please answer and help me?

 

[Greg]

Hello cyrus23,

MHB rule #1 states:

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We ask that you be patient and wait for someone to reply. You are of course welcome to post your progress or additional thoughts that have occurred in the meantime.

We ask that you keep this policy in mind in the future. We also ask that you consider how much less efficient MHB would be if this posting behavior was allowed.

greg1313

 

[soroban]

A merchant received an invoice for \$7000 with credit terms of 7/10, 4/20, n/30 dated January 4.
Partial payments were made as follows: \$2790 on January 12, and \$1920 on January 21.
Determine the balance due at the end of the month.

You must read the discount terms very carefully.

It says: 7/10,\;4/20,\;n/30.

\begin{array}{ccc}\text{This means:} &amp; 7\%\text{ discount if paid within 10 days,}\\<br /> &amp; 4\%\text{ discoiunt if paid within 20 days,} \\ <br /> &amp; \text{net (balance) is due within 30 days.} \end{array}

The merchant paid \$2790 on Jan 12.
This is within 10 days; he is entitled to a 7% discount.

The next step is a bit tricky.
He paid \$2790, which is worth: \frac{\$2790}{ 0.93} = \$3000

Then he paid \$1920 on Jan 21.
This is within 20 day; he is entitled to a 4% discouint.
He paid \$1920, which is worth: \frac{\$1920}{0.96} = \$2000

His final balance is: \$7000 - 3000 - 2000 \,=\,\$2000