Help cmcc simulation
TRINIGYAL
Registered Posts: 2 New contributor 🐸
does anyone remember how to calculate the annual percentage cost of discount in the simulation. It was task 7  invoice £700 but 5% discount will be offered if the invoice is paid in 14 days...
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I've been learning this today 
You'll also need how many days for the normal settlement period 
the formula is:
(d/(100d)) x (365/(ND)) x 100
where d = settlement discount percentage (5%)
N = Normal Settlement Period in days (?)
D = Settlement period for early repayment in days (14 days)0 
TRINIGYAL
 CathG has correctly given the simple interest formula :
(d/(100d)) x (365/(ND)) x 100
 I have told my class that if they use this formula they should add this sentence:

This value is the simple interest percentage rate rather than a true compounded annual percentage so is under valuing the true cost to the business.
 The annual percentage cost of discount involves a geometric calculation so it has to be done using a calculator that has a "to the power of" button.

1+(d/(100d))^ (365/(ND))1
Sandy
sandy@sandyhood.com
www.sandyhood.com0  CathG has correctly given the simple interest formula :
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