 # A vendor offers you an early payment discount. You will get a 2% discount if you pay the balance within 10 days. Otherwise, the full balance is due in 30 days. What is the effective interest rate earned on this discount?

% <-- Enter Discount Percentage
<-- Enter Discount Period
% <-- Enter Full term in Days

A vendor offers you an early payment discount.
You will get a 2% discount if you pay the balance within 10 days.
Otherwise, the full balance is due in 30 days.
What is the effective interest rate earned on this discount?

## Effective Interest Rate on the Discount Formula is below:

This is stated as 2/10 net 30
 Discount % 100 - Discount %
 x
 360 Balance Due Days - Discount Period Days

 2% 100 - 2%
 x
 360 30 - 10

 2% 98%
 x
 360 20%

Effective rate of interest = 0.020408163265306 x 18

### How does the Vendor Discount Effective Rate of Interest Calculator work?

Free Vendor Discount Effective Rate of Interest Calculator - Calculates the effective rate of interest earned from a vendor discount for a prepayment of a balance within a certain amount of days for a percentage discount
This calculator has 3 inputs.

### What 1 formula is used for the Vendor Discount Effective Rate of Interest Calculator?

1. Discount %/(100 - Discount %) * 360/(Balance Due Days - Discount Period Days)

For more math formulas, check out our Formula Dossier

### What 3 concepts are covered in the Vendor Discount Effective Rate of Interest Calculator?

discount
the amount by which the market price of a bond is lower than its principal amount due at maturity
interest rate
the proportion of a loan that is charged as interest to the borrower or proportion of principal credit given to a depositor
vendor discount
Discount percentage paid within m days, else the full price is due in n days