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19 September, 01:21

An invoice dated 4/18/XX received by Ralph's Supply indicated a balance of $7,000. This balance included a freight charge of $500. Terms of the bill were 4/10, 3/30, n/60. Assuming Ralph pays off the bill on April 30, he pays:

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  1. 19 September, 03:45
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    The total amount would be $6,805

    Explanation:

    The computation of the amount paid is shown below:

    invoice amount = $6,500 ($7000 - $500)

    Less - discount ($6,500 * 3%) = ($195)

    Net balance = $6,305

    Add - freight charges = $500

    Total amount paid = $6,805

    In invoice amount, the freight charges are added, so first, we have to deduct the freight charges to get the actual value than we deduct the discount of 3% since the payment was made on April 30.

    From 18 April to April 30, 13 days are there so we take a 3% discount rate since the payment was made within 30 days.

    And, after that, the freight charges are added back to get the total amount which would be paid.
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