Given credit terms of 3/10, n/30 on a sale of $2,000, calculate the sales discount, assuming payment was made within the 10-day time period. $60 $90 $900 $600

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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**Credit Terms and Sales Discount Calculation**

Given credit terms of 3/10, n/30 on a sale of $2,000, calculate the sales discount, assuming payment was made within the 10-day time period.

**Options:**
- **A) $60**
- **B) $90**
- **C) $900**
- **D) $600**

**Explanation:**

The credit terms "3/10, n/30" mean the buyer can take a 3% discount on the invoice amount if the payment is made within 10 days; otherwise, the net (full) amount is due within 30 days.

To calculate the sales discount:
1. Calculate 3% of $2,000:
   \[
   \text{Discount} = \$2000 \times \frac{3}{100} = \$60
   \]
   
Therefore, the correct option is A) $60.
Transcribed Image Text:**Credit Terms and Sales Discount Calculation** Given credit terms of 3/10, n/30 on a sale of $2,000, calculate the sales discount, assuming payment was made within the 10-day time period. **Options:** - **A) $60** - **B) $90** - **C) $900** - **D) $600** **Explanation:** The credit terms "3/10, n/30" mean the buyer can take a 3% discount on the invoice amount if the payment is made within 10 days; otherwise, the net (full) amount is due within 30 days. To calculate the sales discount: 1. Calculate 3% of $2,000: \[ \text{Discount} = \$2000 \times \frac{3}{100} = \$60 \] Therefore, the correct option is A) $60.
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