n invoice is dated July 22 for $5,820 with terms of 2/15, net 30, 2% per month penalty. If the invoice is paid on August 27, what payment amount is required to pay the entire balance owing?

For full marks your answer(s) should be rounded to the nearest cent.


Payment = $0.00 


To determine the payment amount required if the invoice is paid on August 27, we need to analyze the payment terms and apply any penalties accordingly.

### Step 1: Identify Key Information
- **Invoice Date:** July 22
- **Invoice Amount:** $5,820
- **Terms:** 2/15, net 30, 2% per month penalty
  - "2/15" means a 2% discount is available if paid within 15 days.
  - "Net 30" means the full invoice amount is due within 30 days.
  - "2% per month penalty" is applied to the amount due if the payment is late.

### Step 2: Determine the Discount Period
- **Discount Period (2/15):** 
  - The discount is available if payment is made within 15 days from July 22.
  - Deadline for discount: July 22 + 15 days = **August 6**.

Since the payment is made on August 27, the discount period is not applicable.

### Step 3: Determine the Net 30 Period
- **Net 30 Period:**
  - The full amount is due within 30 days from July 22.
  - Deadline for full payment without penalty: July 22 + 30 days = **August 21**.

Since the payment is made on August 27, it is 6 days late.

### Step 4: Apply the Late Payment Penalty
- **Penalty Calculation:**
  - The penalty is 2% per month. However, since the payment is 6 days late, we calculate a proportionate penalty.
  - Days late: 6 days
  - Monthly penalty rate: 2%
  - Daily penalty rate: $ \frac{2\%}{30} \approx 0.06667\% $ per day
  - Penalty amount: $ 5,820 \times \frac{2}{100} \times \frac{6}{30} = 5,820 \times 0.004 = 23.28 $

### Step 5: Calculate the Total Payment
- **Total Payment Amount:**
  - Original Invoice Amount: $5,820
  - Penalty: $23.28
  - **Total Payment:** $ 5,820 + 23.28 = 5,843.28 $

### Final Answer:
- **Payment = $5,843.28**

Would you like any additional details or have any questions?

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**Relative Questions:**

1. How is the penalty calculated for payments made after the net 30 period?
2. What would the payment amount be if it was paid on August 6?
3. Can the discount still be applied if the payment is made after the 15-day period?
4. What happens if the payment is made exactly on the 30th day?
5. How does the penalty affect the total payment if the delay is more than one month?

**Tip:** When dealing with payment terms, always ensure to check the deadlines for any available discounts and penalties to avoid unnecessary charges.

Learn how to calculate the required payment amount for an invoice dated July 22, amounting to $5,820, with terms of 2/15, net 30, and 2% per month penalty. Understand the application of discount periods, net payment deadlines, and penalty calculations. Get detailed steps and rounded payment amount to the nearest cent.

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