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8 December, 14:07

Jacob Co. sells merchandise on credit to Isaiah Co. for $8,600. The invoice is dated on May 1 with terms of 1/15, net 45. What is the amount of the discount and up to what date must the invoice be paid in order for the buyer to take advantage of the discount?

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  1. 8 December, 15:41
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    The discount is for $86

    It will be available until May 16th

    Explanation:

    the credit terms are 1/15, net 45

    the first numebr is the discount amount, 1%

    the second number is the days after billing this discount option is active, 15

    net 45 means the customer can pay the nominal 8,600 within a 45 days period. After that it should renegociate the bill

    The discount will be 8,600 x 1% = 8,600 x 0.01 = 86

    It will be available up to 15 days after billing:

    May 1st + 15 days = May 16th
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