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Benny buys goods with a list price of $4360 on which he receives 10% trade discount.His supplier offers 5% discount for payment within 10 days.Benny pays half of the invoiced amount within 10 days and the balance 3 weeks later.
What is the total amount money that he will pay for his order?
A.$3825.90
B.$3727.80
C.$4142.00
D.$3706.00Hi Benny,
The correct answer is A. Below is the calculation procedures.4960*90%= 3924 (this is amount after removing the trade discount.)
3924*95%= 3727.8 (amount that could be paid if he paid the full amount in 10 days)however, he only paid half of the debt. This means that he paid
3727.8/2 = 1863.9the rest of the debt amount was paid without any cash discount. This means the remaining half was 3924/2 = 1962.00
Thus the amount of money on the pay order = $1962.00+$1863.90 = $3825.90
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