Business FinancesQuestion 338 of 1632
A contractor purchases materials on 30-day terms with a 2% discount if paid within 10 days. On a $20,000 invoice, how much is saved by paying within 10 days?
a.$200
b.$400
c.$600
d.$2,000
Explanation
Early-payment discount = 2% × $20,000 = $400. Taking supplier discounts when cash allows is a simple way to reduce material costs and improve job margins.
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Reviewed by Abraham Chen — Licensed California General Contractor (CSLB License #1101856 — verify)