Discount Calculator

Is it worthwhile to pay in cash with a discount, or is it more advantageous to use the full payment term and then pay the entire amount? This depends on the discount amount, the payment term, and, of course, the interest rate on the bank account.

The discount calculator compares the alternatives of paying in cash with a discount and paying on the due date without a discount, and calculates the difference between the discount amount and the interest expense or lost interest for the cash payment.



Discount Calculator
Invoice Details:
Amount:
Payable in:
Days with:
% Discount
or in
Days without Discount
Alternative Interest Rate:
Alternative Input:
Payable on:
with
% Discount
Payable on:
Net without discount
Calculate
Result:
Cash discount amount:
Effective interest rate:
% with cash discount
Alternative interest rates
Amount saved
by using the cash discount.


Data input:

Amount: Enter the gross invoice amount, i.e., the amount before any discount.

Payable in (x) days with (x) % discount: Enter the number of days you have to pay the amount to take advantage of the discount and the discount percentage.

or in (x) days without discount: Enter the number of days the invoice is due without any discount.

Alternative interest rate (x) % p.a. Credit or loan: Enter the interest rate you would have to pay if you took advantage of the discount, or the interest rate you would forfeit.

Alternative payment details:


Payable on (date) with (x) % discount: Enter the payment date taking advantage of the discount and the discount percentage.

Payable on (date) without discount:Enter the payment date without taking advantage of the discount.

Calculate:Click 'calculate'.

Result:

Discount Amount:The amount of the discount

Effective Interest Rate:The percentage of the discount converted to an annual rate (for comparison purposes only)

Lost Interest on Credit Accounts or Interest on Debit Accounts:Amount that would be payable or lost in interest by taking advantage of the discount.

Result:Amount that can be saved by taking advantage of the discount or amount that would have to be paid in interest by taking advantage of the discount.

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