Description
Return discount/(1-discount) and expm1(-log1p(-discount)/periodDays).
Interest and accrual depend on the rate period, compounding rule and day-count basis. A supplied fraction of a year or coupon period is different from deriving that fraction under a contractual calendar convention.
Return discount/(1-discount) and expm1(-log1p(-discount)/periodDays).
When to use this tool
Use Cash Discount Effective Period Return when you need one interest, accrual or supplied-period calculation.
How to use the tool and how it works
- Enter discountFraction, periodDays. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read periodReturn, dailyCompoundReturn. Use the output convention below.
Require discountFraction in [0, 1) and positive periodDays. Return discount/(1-discount) and expm1(-log1p(-discount)/periodDays).1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| discountFraction | Discount Fraction | Required. Finite number; minimum 0; strictly below 1. |
| periodDays | Period Days | Required. Finite number; strictly above 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| periodReturn | Period Return | Required. Finite number. |
| dailyCompoundReturn | Daily Compound Return | Required. Finite number. |
{
"input": {
"discountFraction": 0.2,
"periodDays": 1
},
"output": {
"periodReturn": 0.25,
"dailyCompoundReturn": 0.25
}
}Limitations and assumptions
- The result models the return from paying a discounted amount early, not a full APR or a recommendation to forgo credit terms. Taxes, fees and actual day-count rules are omitted.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Use the full schedule and applicable agreement for actual charges. State rate units, compounding, calendar basis and rounding policy rather than assuming one universal accrual convention.
References
Similar or alternative tools
- Loan Cashflow Value Date Offset
Multiply cashflow by (1+dailyRate)^dayOffset.
- Finance: Coupon Accrual From Explicit Day Counts
Multiply coupon by elapsed/period.