Net 30 Cost Calculator

About this calculator

Trade credit terms like “2/10 net 30” mean a buyer gets a 2% discount if they pay within 10 days, but owes the full invoice by day 30 either way. Skipping the discount and paying on day 30 is effectively borrowing that 2% for an extra 20 days — the annualized cost formula is APR = (Discount % ÷ (100% − Discount %)) × (365 ÷ (Full Days − Discount Days)), which for 2/10 net 30 works out to (2/98) × (365/20) ≈ 37.2% APR.

That implied rate is far higher than almost any bank line of credit, which is why finance textbooks treat “always take the early-payment discount, even if it means borrowing to do it” as close to a universal rule. Accounts payable teams, small business owners, and finance students use this calculator to see the real annualized cost of standard supplier terms and decide whether drawing on a credit line to capture the discount is worth it.