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.