Problema Solution
A man received an invoice dated March 9, with term 2/10, n/30 amounting to $250. He paid the bill March 12. How much was the cash discount?
Answer provided by our tutors
"2" shows the discount percentage offered by the seller.
"10" indicates the number of days (from the invoice date) within which the buyer should pay the invoice in order to receive the discount.
"n/30" states that if the buyer does not pay the (full) invoice amount within the 10 days to qualify for the discount, then the net amount is due within 30 days after the sales invoice date.
March 12 is 3 days after March 9 thus the man will have 2% discount of $250 or in cash:
0.02*250 = $5 cash discount.