vail ski shop received a $1,205 invoice dated july 12 with $\frac{2}{10}$, $\frac{1}{15}$, $\frac{n}{60}$…
vail ski shop received a $1,205 invoice dated july 12 with $\frac{2}{10}$, $\frac{1}{15}$, $\frac{n}{60}$ terms. on july 26, vail sent a $489 partial payment. a. what credit should vail receive? note: round your answer to the nearest cent. b. what is vails outstanding balance? note: round your answer to the nearest cent.
Answer
Explanation:
Step1: Analyze discount terms
The terms $\frac{2}{10},\frac{1}{15},\frac{n}{60}$ mean a 2% discount if paid within 10 days, a 1% discount if paid within 15 days, and net - amount due within 60 days. The invoice is dated July 12 and the payment is made on July 26, so a 1% discount applies.
Step2: Calculate the credit amount
Let the credit amount be $x$. We know that the amount paid $P$ is related to the credit amount by $P=(1 - d)x$, where $d = 0.01$ is the discount rate. Given $P = 489$, we can solve for $x$ using the formula $x=\frac{P}{1 - d}$. So $x=\frac{489}{1 - 0.01}=\frac{489}{0.99}\approx493.94$.
Step3: Calculate the outstanding balance
The invoice amount is $A = 1205$. The credit amount is approximately $493.94$. The outstanding balance $B=A - x$. So $B = 1205-493.94 = 711.06$.
Answer:
a. $493.94 b. $711.06