Early payment discount
Converts an early-settlement discount into an implied annual rate.
$
2.0%
12.0%
Implied annual rate
21.3%
Discount given up
$180
- Amount if paid early
- $8,820
- Days of credit surrendered
- 35
- Verdict
- Take the discount
- Cost of financing the gap
- $104
If the implied annual rate beats your cost of capital, taking the discount is worth it.
How this is calculated
- · Uses a 365-day year.
- · Assumes the discount is genuinely available.
Estimates only — not financial, tax or legal advice.