Question

A buyer owes a supplier $820. The terms were 3/10, n/60. Within 10 days, the buyer sent in a payment of $140. How much is the new balance? (Round your answers to the nearest hundredth)

Answer 1

Answer:

$696

Explanation:

As per the question, the terms for payment in 10 days is 3% discount. To calculate the new balance, we need to deduct the Total Amount due from Amount Credited for this payment.

Amount Credited will be calculated by dividing the amount paid to supplier from 100% less the discount rate applied. As shown below:

Amount Paid / (100% - discount rate)

140 / (100% - 3%) = 144.33 or Rounding off to $144

New Balance = 840 - 144 = $696

Therefore, new balance is $696.