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Calculate the two payment amounts
The full invoice is 1,000,000 with a 1.5% qualifying discount. Day-10 payment is 985,000, and day-45 payment is 1,000,000. The discount amount is 15,000.
Use the discounted amount as the modeled borrowing base
| Quantity | Amount |
|---|---|
| Borrowed early-payment amount | 985,000 |
| Simple interest at 6.5% × 35/365 | 6,139.3836 |
| Discount less that interest | 8,860.6164 |
Identify omitted costs and constraints
The exercise assumes that exact amount is financed for exactly 35 days with no fee or additional effect. A real facility’s costs, day-count rule, availability and payment conditions may differ.
Avoid an automatic borrowing instruction
A positive arithmetic difference under the supplied assumptions is not a complete recommendation for a particular company. Use actual-horizon terms and constraints for the real decision.