Pretty simple question - dont miss it on the exam: this is just saying that if an invoice is paid within 10 days the co gets a 2% discount on the total amount and if they dont take the discount the full amount is due within 60 days of receiving the invoice. ((1 + 2%/98%) ^ 365/50) -1 Basically - ((1 + (Discount/1-discount) ^ 365/no. days beyond discount date) - 1 50 days = 60days - 10day window.
Was there a question on how to use this, or just understanding what 2/10 net 60 means>
Ive come across a question or two on this before. It just tells you the cost if you do not take the presented discount.