How to calculate the discount period and interest bearing period of commercial bills?

Mondo Finance Updated on 2024-01-28

A commercial draft is a form of payment between businesses or individuals, usually for the purchase of goods or services. In the transaction of commercial bills, the discount period refers to the period before the maturity of the bill, during this time, the bearer can apply to the bank or other financial institutions for discounting to obtain financial support. The interest-bearing period is the period from the date of issue of the note to the date of final payment.

First, let's take a look at how the discount period is calculated. The discount period is the time frame within which a bank or other financial institution discounts a bill within a period of time determined according to the actual term of the bill. The discount period is generally calculated from the date of the invoice to the actual maturity date of the bill. For example, if a note has a validity period of 3 months, then its discount period is 3 months plus 1 month, which is 4 months.

Secondly, let's take a look at the calculation method of the interest-bearing period. The interest-bearing period refers to the time frame in which the bearer pays interest to the bank or other financial institution within the specified time after the maturity of the note. The interest-bearing period consists of two parts: one is the interest calculation period before the maturity of the note;The second is the principal repayment period after the maturity of the notes.

At the time of issuance, the interest rate on the note is usually fixed (i.e., not floating). Therefore, before the maturity of the note, the bearer needs to calculate the interest amount of the note at the prescribed interest rate and pay it to the bank or other financial institution on time. This process is known as the interest-bearing period of the note.

Finally, let's look at the relationship between the discount rate and the interest rate. The discount rate refers to the loan interest rate of banks or other financial institutions, which is a set of values determined comprehensively according to market supply and demand, risk and other factors. The setting of the discount rate directly affects the ** of the note and the income of the holder.

The relationship between the discount rate and the interest rate can be expressed by the following formula:

Discount rate = bill interest rate + bill maturity number of days) (bill maturity - 1).

Among them, the bill interest rate refers to the fixed fee charged by banks or other institutions when providing loans to customers, which is set by institutions such as central banks or commercial banks. The term of the bill refers to the validity period of the bill, that is, the difference of days between the maturity date of the bill and the date of the invoice. The number of days is measured in months, and if there are 30 days in a month, the term of the note is 29 days.

From the above analysis, we can see that the discount period and interest calculation period of commercial bills are set to meet the needs of both the bearer and the bank or other financial institution. The discount period is to help the bearer obtain the funds they need at a lower cost, while the interest period is to avoid the situation that the payment cannot be made in time due to a shortage of funds.

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