Discount Rate In Mathematics

Understanding of Discount Rate

Discount Rate is the interest paid by the borrower upon receipt of the loan. The process of discount calculation uses a single interest system, so to calculate the size of the discount is almost equal to the calculation of the amount of a single interest if the amount of the loan and the discounted % is known.


Discount Rate Formulas

D = M x i x t

Information:
D = Discount Rate
M = Capital
i = Interest
t = Time


Example of Discount Rate

Loans of $2,000 with  3%/month discount rate system and will be refunded after 5 months. Please specify the value of the discount rate!

Resolution:
M = $2,000
i = 3%/month
t = 5 months

D = M x i x t
D = $2,000 x 3% x 5
D = $300

So the value of the discount rate is $300.

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Reference :
  • The To'Ali book of sales and accounting mathematics books

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