Question

Ellen Co. has offered their customers a 1% discount off the amount owed if they pay within 15 days of receiving their bill. Handler Company owed Ellen Co. $2,185 as of May 1st and paid Ellen Co. on May 7th. How much cash did Handler Company send to Ellen Co. on May 7th?

Answer 1

Answer:

Money send to Ellen = $2163.15

Explanation:

Discount offered by the Ellen Co. = 1%

Owed amount = $2185

Since the amount is repaid within 15 days to the offer of a 1% discount will be applicable. So the Handler will send an amount that is 1% less than the actual amount.

Money send to Ellen = 2185 - (1% x 2185)

Money send to Ellen = $2163.15