If goods were bought from Tanko at a cost price of #9,000 with a cash discount of 5%, how much will be paid assuming prompt payment was made?
Question 1 Report
If goods were bought from Tanko at a cost price of #9,000 with a cash discount of 5%, how much will be paid assuming prompt payment was made?
Answer Details
The correct answer is #8,550.
When goods are purchased with a cash discount, the amount to be paid can be calculated using the following formula:
Net Amount = Gross Amount - Discount
In this case, the gross amount is #9,000 and the cash discount is 5%. To calculate the net amount, we first need to determine the discount amount:
Discount = Gross Amount x Discount Rate
Discount = #9,000 x 0.05
Discount = #450
The net amount can now be calculated using the formula above:
Net Amount = Gross Amount - Discount
Net Amount = #9,000 - #450
Net Amount = #8,550
Therefore, if prompt payment is made, the amount to be paid is #8,550.
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