Question 1.) 5/10 = 0.05
Invoice date: August 1
Terms: 5/10 (EOM)
Day of Last Discount: 5%/100 = 1/20
Answer: 5% , September 10 = (0.05)
Question 2.). Terms of Sale:
4/10
% Cash Discount: 4
Days to take Discount: 10
n/30
Net Amount due in: N
Days to Pay Net Amount: 30
Complement Method:
Terms = 4/10; n/30
Net Price = 919.60
Answer: Cash Price: $882.82
Complement Method:
Method of computing the net price directly, using the complement of the trade discount rate.
Complement Rate:
A rate equal to 100% minus the discount rate; used with the complement method in determining trade or cash discounts.
Hope that helps!!!! : )
