How to Calculate Discount for Early Payment
What discount does Ellen Co. offer to customers who pay within 15 days?
1% discount
How much did Handler Company owe Ellen Co. as of May 1st?
$2,185
How much cash did Handler Company send to Ellen Co. on May 7th?
Final answer: Handler Company received a 1% discount for early payment and sent Ellen Co. $2,163.15 on May 7th, after applying the discount to the total amount owed of $2,185.
Calculating Discount and Payment Amount
Ellen Co. offers a 1% discount to customers who pay within 15 days. Handler Company owed Ellen Co. $2,185 as of May 1st. When Handler Company paid on May 7th, they were eligible for the discount. To calculate the discount amount:
Discount = Total Amount * Discount Percentage
Discount = $2,185 * 0.01 = $21.85
To find the amount paid after taking the discount:
Amount Paid = Total Amount - Discount
Amount Paid = $2,185 - $21.85 = $2,163.15
Therefore, Handler Company sent Ellen Co. $2,163.15 on May 7th.