Promissory Note Discount Calculator
See exactly what you net after the discount is deducted from a note's face value
When you cash in a promissory note before it matures, the interest for the remaining term is deducted up front from the face value. This tool figures out both the discount charge and your net proceeds — just enter the face value, the annual discount rate, and the issue and maturity dates. It's a quick way for treasury staff and small business owners to decide whether discounting a note is worth it. All math happens in your browser and nothing you enter is sent to a server.
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How to use
- Enter the note's face value and the annual discount rate (%)
- Enter the note's issue date and maturity date
- Choose the start date for the discount period (issue date, today, or a custom date) and the day-count basis (365 or 360 days)
- Review the calculated discount charge and net proceeds, and copy them if you need to
FAQ
- How is the discount charge calculated?
- The discount (the interest taken up front) equals face value × (annual discount rate ÷ 100) × (days in the discount period ÷ day-count basis). Your net proceeds are the face value minus that discount.
- What's the difference between a 365-day and a 360-day basis?
- 365 days is the convention banks typically use, while 360 days is customary in private lending and note markets. With identical inputs, the basis you pick will shift the discount charge slightly.
- How do I choose the discount start date?
- You can base it on the issue date, today's date, or a date you specify yourself. The days remaining until maturity are counted from whichever start date you choose.