Early Payment Discount Annual Cost Calculator
Compare the annualized cost of skipping an entered invoice discount with a financing rate.
YOUR CALCULATION
Result
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Calculation steps
Work through one step at a time or reveal the complete calculation. The steps use your current inputs.
How to calculate
Treat the early discounted payment as the financing principal and the saved discount as the cost of waiting.
Period cost=d/(1−d); simple annual cost=period cost×year days/(due−discount day)
Worked example
2/10 net30 gives period cost2/98 and annual simple cost about37.2449% on a365-day basis.
Assumptions and input details
Requires full-payment day after discount day. Simple annualization and compounded equivalent are comparisons, not actual contractual APR, tax effects, credit risk or a recommendation to borrow. No payment is made.
Using this calculator
Can I enter my own problem?
Yes. Replace the example values with your own inputs. The result, calculation steps, tables and applicable diagrams update from those inputs. Blank or invalid values clear the result; example values are never silently substituted for missing inputs.
Are the results exact?
Results use floating-point arithmetic and displayed rounding. Read the formula, assumptions and any stated data precision before interpreting the result.
Is my input uploaded?
The calculation runs in your browser. No account, file upload or external AI service is required. Inputs are not saved between page reloads.
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