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Early-Payment Discount Calculator

See what an early-payment discount saves in cash — and the implied annual return on paying early, so terms like 2/10 net 30 stop being a guess.

$
%
days
days

You save

$20.00

Pay $980.00 early

Invoice$1,000.00
You save$20.00
Net to pay early$980.00
Implied annual return(of paying early)37.24%
The implied annual return expresses the discount as an interest rate: a high number means taking it (or offering it) is a strong deal. This is a general estimate, not financial advice.

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What "2/10 net 30" actually offers

Prompt-payment terms look cryptic but read simply: "2/10 net 30" means take 2% off if you pay within 10 days, otherwise the full amount is due in 30. The first number is the discount percentage, the second is the discount window, and the "net" figure is the final due date. This calculator turns those terms into two plain numbers — the cash you save and the price of not bothering.

The cash saving is the easy half: 2% of a 1,000 invoice is 20, so you pay 980 instead of 1,000. Whether that is worth paying twenty days sooner is the half most people skip — and it is where the real decision lives.

Why the implied APR is the number that matters

Passing up the discount is really borrowing money — you keep your cash for the extra days, but you pay full price for the privilege. The implied APR puts that on an annual footing so you can compare it against what the cash is worth to you elsewhere. The maths: discount ÷ (100 − discount), scaled by 365 ÷ the extra days you gain by waiting, as a percentage.

For a classic 2/10 net 30, that works out to roughly 37% a year — far more than any savings account or short-term loan. Unless your cash is earning more than the implied APR, taking the discount is the better deal. When it runs the other way (you are the one offering the discount), the same figure tells you how expensive your early-payment incentive really is.

Frequently asked questions

What does 2/10 net 30 mean?
It is a payment term: a 2% discount if you pay within 10 days, with the full balance otherwise due in 30 days. On a 1,000 invoice the discount is 20, so you pay 980 if you settle early — and forgoing it carries an implied annual cost of about 37%.
How is the implied APR calculated?
Take the discount as a share of what you would still owe after it — discount ÷ (100 − discount) — then annualise it by multiplying by 365 ÷ (net days − discount days). For 2/10 net 30 that is (2 ÷ 98) × (365 ÷ 20) × 100 ≈ 37.24% a year. If the result beats your return on cash, take the discount.
Should I always take an early-payment discount?
Usually, because the implied APR is typically high — around 37% for 2/10 net 30. Take it whenever that annual rate is higher than what your cash earns or costs elsewhere. Hold off only if paying early would leave you short on cash you genuinely need, or if your own funds are earning more than the implied APR.
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Last updated 2026-06-02.