Modern Video buys Blu-ray discs with an invoice price of $30,200, and terms of sale of 2/15, n/30. What is the net amount due on the order if the bill is paid by the 10th day?

$20,200

$29,088

$19,180

$29,596

Ans. Terms of sale 2/15, n/30 is a credit term and means the following:

"2" shows the discount percentage offered by the seller.

"15" indicates the number of days within which the buyer should pay the invoice in order to receive the discount.

"n/30" states that if the buyer does not pay the (full) invoice amount within the 15 days to qualify for the discount, then the net amount is due within 30 days.

[In short; 2% discount for the payment within 15 days and the full amount to be paid within 30 days]

  In the given question bill is paid by 10th day (within 15 days), hence Modren video is entitled to receive 2% discount on bill payment.

Computation of net amount due:

= 30200 - 2 /100 * 30200 [30200 - 2% of 30200]

= 30200 - 604

= $29,596