Enter the total invoice amount and the discount rate into the calculator to determine the discount and net amount for a 2/10 Net 30 term.
2/10 Net 30 Formula
The following formula is used to calculate the discount and net amount for a 2/10 Net 30 term.
D = P * r
Variables:
- D is the discount amount ($)
- P is the total invoice amount ($)
- r is the discount rate (decimal)
- N is the net amount to be paid after discount ($)
To calculate the discount amount, multiply the total invoice amount by the discount rate. To calculate the net amount to be paid after discount, subtract the discount amount from the total invoice amount.
What is a 2/10 Net 30?
2/10 Net 30 is a term used in business to signify that a purchaser can take a 2% discount of the invoice amount if the invoice is paid within 10 days. If the invoice is not paid within 10 days, the full amount is due within 30 days of the invoice date. This is a form of trade credit which benefits the buyer for early payment.
How to Calculate 2/10 Net 30?
The following steps outline how to calculate the net amount to be paid after discount for a 2/10 Net 30 scenario.
- First, determine the total invoice amount ($).
- Next, determine the discount rate (decimal).
- Next, calculate the discount amount ($). Use the formula D = P * r.
- Finally, calculate the net amount to be paid after discount. Use the formula N = P – D.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
total invoice amount ($) = 500
discount rate (decimal) = 0.02
