ACME Inc,Bills Its Clients on the First of the Month

question 34

Multiple Choice

ACME Inc.,bills its clients on the first of the month.For example,any sale made in the month of July is billed August 1 and is due September 1.Clients traditionally pay as follows: 70% by the end of the first month August) ,20% by the end of the second month (September) ,9% by the end of the third month (October) ,and 1% default on their bills.What is the dollar value of January billings collected in April? $$\begin{array} { | l | l | l | l | l | l | } \hline & { \text { First-Quarter Actual Sales } } & && { \text { Second-Quarter Anticipated Sales } } \\\hline \text { January } & \text { February } & \text { March } & \text { April } & \text { May } & \text { June } \\\hline \$ 88,000 & \$ 74,000 & \$ 96,000 & \$ 99,000 & \$ 82,000 & \$ 63,000 \\\hline\end{array}$$

• A)$7,040
• B)$7,920
• C)$3,920
• D)$0.00

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Definitions:

Interest Rate

The percentage charged on borrowed money, or earned through deposited funds, over a period of time.

Lottery

A form of gambling that involves the drawing of numbers at random for a prize.

Annuity Due

A type of annuity with payments made at the beginning of each period, rather than at the end, typically utilized in lease and loan agreements.

End-of-Period Payments

Payments made at the conclusion of a payment period, commonly used in the context of loans or leases.