A retailer buys merchandise from a supplier with an invoice amount of $12,400. The terms of the sale are 5/20, n/30. What is the net amount due (in $) on the order if the bill is paid by the 20th day?

The terms of the sale are **5/20, n/30**. This means:

- A **5% discount** is offered if the payment is made within **20 days**.
- The full (net) amount is due in **30 days** without any discount.

Since the payment is made by the 20th day, the retailer is eligible for the 5% discount.

### Steps to calculate the net amount due:
1. **Invoice amount** = $12,400
2. **Discount** = 5% of $12,400 = $ 0.05 \times 12,400 = 620 $

3. **Net amount due** = Invoice amount - Discount = $ 12,400 - 620 = 11,780 $

Thus, the net amount due if the bill is paid by the 20th day is **$11,780**.

Would you like further details or have any questions?

Here are 5 related questions to expand the topic:
1. How would the net amount change if the payment was made after 30 days?
2. Can similar discount terms be calculated for other percentages like 2/10, n/30?
3. How does early payment affect the overall profit for a business?
4. What is the benefit of offering early payment discounts from a supplier’s perspective?
5. What is the difference between simple discount and compound discount in business transactions?

**Tip**: Always verify the exact terms of payment and deadlines when taking advantage of discounts in business transactions to ensure cost savings.

A retailer buys merchandise from a supplier with an invoice amount of $12,400. The terms of the sale are 5/20, n/30. What is the net amount due (in $) on the order if the bill is paid by the 20th day?

Learn how to calculate the net amount due when a retailer is offered a 5% discount on a $12,400 invoice with payment terms of 5/20, n/30. This step-by-step guide covers percentage calculations and discount formulas, suitable for students in Grades 8-10.

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