[Anonymous]

the BEC ninja notes say:

the cost of foregoing a trade discount is:

(Disc % x 365) / (100%-Disc %) x (Pay Period–Disc Period)

but I have seen multiple places that it is calculated as:

[365 / (pay period – disc. period)] x [ disc. % / (100% – disc.%)]

I dont see anyway to mathematically make these two formulas the same, so is there a typo in the ninja notes, or am i misunderstanding, or is there a typo everywhere else i have looked….

[ShelahV]

Let me see if I can type this on my iPad in a way that helps.

365 ………. Disc %

---

X

---

(PP-DP) … (100- disc %). This the 2nd formula (Becker used this)

Ninja is basically multipling the top 2 numbers then dividing it by the product of the bottom 2.

365. X. Disc %

---

(PP-DP) X. (100-disc %)

It's calculation the same thing except when you use the first method you have to move the decimal point to get your % (take it times 100 essentially) The ninja method you don't. I didn't use ninja notes for BEC but I'm assuming you typed it in here correctly. Just a different way to lay out the formula.

BEC 8.14.14 - 87!
FAR 1.8.15 - 89!
REG 4.15.15 - 86!
AUD 7.2.15 - 90!

Application submitted 8.6.15
Licensed CPA 8.19.15

Benefit in living in a small state SD!

[OnMyWay732]

That first disc % in the first formula is just divided and goes to the beginning of disc% / (100-disc%) in the second formula

AUD - July 2014 - 76
REG - August 2014 - 82
FAR - November 2014 - 78
BEC - January 2015 - 81

DONE!!!!

Used Becker online. Who needs a text when you can burn your eyes out staring at the screen for months on end?

"Let me tell you something you already know. The world ain't all sunshine and rainbows. It is a very mean and nasty place and it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain't how hard you're hit; it's about how hard you can get hit, and keep moving forward. How much you can take, and keep moving forward. That's how winning is done!"

[mwsr6]

Use 2 10 net 30 as an example:

1) 2% / 98% = .0204

2) 20 days difference between 10 and 30

3) using a 360 day year – 360/20=18

4) 18 x .0204 = .367 or 36.7% annualized cost of not taking the discount

[Anonymous]

ok, i am not seeing how this crosses out to become the same formula, and i have tried putting sample numbers into each, and i get different results, so apparently i just cant do math????

using 2/10 net 30 assuming a 360 day year….

using the ninja method i get…

(discount % x 360) / ( 100% – discount %) x (pay period – discount period)

(.02 x 360) / (1-.02) x (30 -10)

(7.2) / (.98) x (20)

7.346939 x 20 = 146.9388

using the other way

[360 / (pay period – disc. period)] x [ disc. % / (100% – disc.%)]

[360 / (30 – 10)] x [ .02 / ( 100% – .02)]

[18] x [.02 / .98]

18 x .020408 = .367 or 36.7%

I believe 36.7% is the correct cost of foregoing the trade discount, but i fail to see the computation of how to get the same answer???

[ShelahV]

The problem is your order of operations in your second to last step.

(.02 x 360) / ((1 -.0 2) x (30-10))

7.2 / (.98 x 20)

7.2 / 19.6

=.367 or 36.7% which is the same as Becker.

I don't have the ninja notes so I don't know if you dropped a (). But you find the product of the top and divide it by the TOTAL product of the bottom.

BEC 8.14.14 - 87!
FAR 1.8.15 - 89!
REG 4.15.15 - 86!
AUD 7.2.15 - 90!

Application submitted 8.6.15
Licensed CPA 8.19.15

Benefit in living in a small state SD!

[Anonymous]

ahhhhh

(Disc % x 365) / (100%-Disc %) x (Pay Period–Disc Period)

that is the formula copy and pasted from the ninja notes…. what you're saying is it should be

(Disc % x 365) / [ (100%-Disc %) x (Pay Period–Disc Period) ]

[Author]

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