Discount Calculator

This on-line calculator automatically determines whether it is economically sound to accept a discount offered by a vendor. In order to utilize this on-line calculator, you must enter the discount rate offered by the vendor, the total number of days in the payment period, and the number of days left to accept a discount from the vendor.

• Instructions for Using the Discount Calculator
• Go to Discount Calculator

On-Line Calculator

Instructions

This on-line calculator automatically determines whether it is economically sound to accept a discount offered by a vendor. In order to utilize this on-line calculator, you must enter the discount rate offered by the vendor, the total number of days in the payment period, and the number of days left to accept a discount from the vendor.

For example, if a vendor offers a 2 percent/10 net 30 discount and six days have passed since the invoice was submitted to the agency, you would enter .02 in the box entitled "Discount Percent", 30 in the box entitled "Total Days in the Payment Period" (30 days to pay before payment is considered late) and 4 in the box entitled "Days Left in the Discount Period" (10 days in the discount period,minus the six days elapsed since the invoice was submitted).

This calculator will determine whether or not the effective annual discount rate exceeds the current value of funds rate. If the effective annual discount rate exceeds the current value of funds rate, payment may be made early to maximize cost savings. However, if the current value of funds rate exceeds effective annual discount rate, payment should be made as close to the payment due date as possible.

The current value of funds rate is currently 3%, or .03, and is prepopulated in the box.