Question

Jacob Co. sells merchandise on credit to Isaiah Co. for $9,700. The invoice is dated on May 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

Answer 1

Answer:

  1% by May 16

Explanation:

The "1/15" part of the terms means there will be a 1% discount if the invoice is paid within 15 days. 15 days from May 1 is May 16.

The discount is 1% if the invoice is paid by May 16.