Cash Discount Calculator
Turn 2/10 net 30 style terms into APR and savings.
What it does
Suppliers pay early birds with terms like 2/10 net 30: take two percent off by day ten, otherwise full by day thirty. Skipping feels free but funds twenty extra days with the discount left behind.
The tool above takes discount percent plus discount and net days and returns APR, savings per thousand, and daily rate. The defaults 2, 10, and 30 match the worked example, so the page opens showing 36.73 percent.
APR is discount over (100 minus discount) times 360 over (net minus discount days). Here 2 over 98 times 360 over 20 is 36.73 percent. Savings per thousand is ten times discount percent in dollars. Daily divides APR by 360.
Use this to rank early pay against credit lines. If borrowing costs less than the discount APR, pay early with debt. If cash earns little and terms bite, take the discount.
This page shows the formula, one full hand checked example at 2/10 net 30, a reference table, and practice checks that run through the tool.
How to use
- Type discount percent, for example 2.
- Type discount days, for example 10.
- Type net days past discount days, for example 30.
- Read Cost APR for skipping.
- Read Save per 1000 to price one invoice.
- Compare APR with your borrowing rate.
Formula
- d
- Discount percent.
- disc/net
- Day counts with net past disc.
- 360
- Bank year days here.
Zero discount gives 0 APR. Net must top discount days or the tool stops.
Worked example
Example: 2/10 net 30
Terms two percent ten days, net thirty. Find skip cost.
- Ratio: 2 / 98 = 0.020408.
- Days saved: 30 minus 10 = 20.
- Annualize: 360 / 20 = 18.
- APR: 0.020408 x 18 x 100 = 36.73 %.
- Per 1000 save $20.00.
- Daily 36.73 / 360 = 0.102 %/day.
Reference table
| Terms | APR | Per 1000 |
|---|---|---|
| 1/10 net 30 | 18.18 % | $10.00 |
| 2/10 net 30 | 36.73 % | $20.00 |
| 3/15 net 45 | 37.11 % | $30.00 |
Limits
- Bank 360 day year here. Exact day counts vary.
- Single discount tier only.
- No fees or freight splits here.
- Borrowing comparison needs all in costs.
Common mistakes
- Dividing by discount instead of net of discount.
- Using net days instead of saved days.
- Reading 2 percent as 2 dollars per hundred? Actually correct, but missing annualize.
- Skipping because percent looks small.
- Mixing 365 with 360 across options.
Try it yourself
Quick checks. Answers sit tucked under each question.
1/10 net 30?
APR 18.18 %, save $10.00, daily 0.051 %/day.
3/15 net 45?
APR 37.11 %, save $30.00, daily 0.103 %/day.
Questions
2/10 net 30 APR?
36.73 %.
Per 1000?
$20.00.
Pay early?
If borrowing under APR, yes.
Daily?
APR over 360.
Zero discount?
0 APR.
360 or 365?
360 here. State basis when comparing.