How to calculate Credit Cost? | Trade Credit Discount with examples, formula and calculator

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How to calculate Credit Cost? | Trade Credit Discount with examples, formula and calculator

Formula of Credit Cost calculation

Cost of Trade Credit = [1+ (Discount % / (1 – Discount %))] [365 / (Payment Days – Discount Days)] – 1

Discount in %
Discount Days
Payment Days

[insert_php]

$D=$_POST[‘D’];
$I=$_POST[‘I’];
$P=$_POST[‘P’];

$A= $D/100 ;
$temp =pow((1+($A / (1-$A))),365/($P-$I))- 1;
$t=$temp*100;

[/insert_php]Result:

Cost of Trade Credit in %


[insert_php]
echo($t);
[/insert_php]

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