# How to calculate Credit Cost? | Trade Credit Discount with examples, formula and calculator

## Formula of Credit Cost calculation

Cost of Trade Credit = [1+ (Discount % / (1 – Discount %))] ^{[365 / (Payment Days – Discount Days)]} – 1

Cost of Trade Credit = [1+ (Discount % / (1 – Discount %))] ^{[365 / (Payment Days – Discount Days)]} – 1