Question

Artistic Designs received an invoice for $3,250 dated April 25 with terms 3/10, 1/25, n/60. Artistic paid $1,000 on May 4, $650 on May 13, and $1,000 on May 31. What balance was still owed after May 31?

a) $0
b) $1,250
c) $1,600
d) $2,250

Answer 1

To determine the balance owed after May 31, calculate the remaining amount due after each payment. The remaining balance after May 31 is $600.

Step-by-step explanation:

To determine the balance owed after May 31, we need to calculate the remaining amount due after each payment. The invoice amount is $3,250 with terms 3/10, 1/25, n/60. The terms mean that if payment is made within 10 days, a 3% discount is given, otherwise the full amount is due within 60 days. Let's break down the calculations:

1. Payment 1 (May 4): $3,250 - $1,000 (payment) = $2,250
2. Payment 2 (May 13): $2,250 - $650 (payment) = $1,600
3. Payment 3 (May 31): $1,600 - $1,000 (payment) = $600

Therefore, the remaining balance owed after May 31 is $600. The correct answer is option c) $1,600.