Praxis Business-Education-Content-Knowledge-5101 Question # 36 Topic 4 Discussion

The equipment costs $3,500, and a 1% discount is offered for payment within 30 days. Since the owner pays in two weeks (within 30 days), they qualify for the discount. Discount = 1% of $3,500 = 0.01 × $3,500 = $35. Amount paid = $3,500 − $35 = $3,465. Option A ($2,975) and Option B ($3,000) suggest much larger discounts, and Option C ($3,150) is incorrect. The original document’s Option A ($2,625) seems to be a typo; the correct answer is $3,465, corresponding to Option D after correcting the choices. This question tests trade discounts in the Accounting and Finance category.