• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • FIA Forums
  • CIMA Forums
  • OBU Forums
  • Qualified Members forum
  • Buy/Sell Books
  • All Forums
  • Latest Topics

20% off ACCA & CIMA Books

OpenTuition recommends the new interactive BPP books for March 2025 exams.
Get your discount code >>

Effective Cost of Discount

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › Effective Cost of Discount

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • October 31, 2017 at 5:05 pm #413887
    ahmed9729
    Member
    • Topics: 66
    • Replies: 60
    • ☆☆

    Sir, for effective cost of discount, I use the formula, [ (Discount/Amount left to be paid) * (365/Reduction in days) ] *100 to get the answer. However, using your method, which is (1+R)^365/no. of days reduced , it provides a different answer. Why is that?

    Thank you

    November 1, 2017 at 6:40 am #413931
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54806
    • ☆☆☆☆☆

    It is because you are using the wrong formula 🙂

    The interest is effectively compounded which is why it is taken to the power 365 to compound for 365 days.

    If you are unsure about compounding interest then it will help you to watch the free Paper F2 lectures on interest.

  • Author
    Posts
Viewing 2 posts - 1 through 2 (of 2 total)
  • The topic ‘Effective Cost of Discount’ is closed to new replies.

Primary Sidebar

Donate
If you have benefited from our materials, please donate

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE 2025 Exams

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • John Moffat on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • ukoa on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Kasim on Double Entry Bookkeeping (part a) – ACCA Financial Accounting (FA) lectures
  • Gracemm on FA Chapter 5 Questions IAS 37 – Provisions, Contingent Liabilities and Contingent Assets
  • John Moffat on The Statement of Financial Position and Income Statement (part c) – ACCA (FA) lectures

Copyright © 2025 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in