# Mel’s furniture received an invoice dated September 27 for five bedroom sets at $3,000 each. The invoice indicated a trade discount of 5/8/3. The seller of the furniture prepaid the freight of $200. Terms were 2/10 FOB. Assuming Mel pays on October 2, what amount would be paid?

## To calculate the amount that Mel would need to pay, we will need to consider the cost of the furniture, the trade discount, and the prepaid freight. Let's break down the calculation step by step:

1. Calculate the cost of the furniture:

Mel ordered five bedroom sets at $3,000 per set.

Cost of the furniture = 5 sets * $3,000/set = $15,000

2. Calculate the trade discount:

The trade discount is expressed as 5/8/3. This means that there are three successive discounts applied: 5%, 8%, and 3%. Each discount is applied to the net amount after the previous discount.

Let's calculate the net amount after each discount:

1st discount: $15,000 - (5% of $15,000) = $15,000 - ($15,000 * 0.05) = $15,000 - $750 = $14,250

2nd discount: $14,250 - (8% of $14,250) = $14,250 - ($14,250 * 0.08) = $14,250 - $1,140 = $13,110

3rd discount: $13,110 - (3% of $13,110) = $13,110 - ($13,110 * 0.03) = $13,110 - $393.30 = $12,716.70

3. Calculate the net amount including prepaid freight:

The prepaid freight amount is $200, which needs to be added to the net amount:

Net amount including prepaid freight = $12,716.70 + $200 = $12,916.70

4. Calculate the payment amount after the cash discount:

The terms are 2/10, which means that if Mel pays within 10 days, he can take a 2% cash discount. Otherwise, the full amount is due.

If Mel pays on October 2, it means he pays within 6 days (September 27 to October 2). Therefore, he is eligible for the cash discount.

Payment amount after cash discount = $12,916.70 - (2% of $12,916.70) = $12,916.70 - ($12,916.70 * 0.02) = $12,916.70 - $258.33 = $12,658.37

So, Mel would need to pay $12,658.37.