Work out commercial paper discount instantly with clear inputs, formula shown and shareable results.
Commercial paper is issued at a discount and redeemed at face value, so the issuer's cost is the discount rather than a coupon. The effective annual yield exceeds the quoted discount rate because of intra-year compounding.
Commercial paper price
Price = face / (1 + rate × days/365); effective yield = (face/price)^(365/days) - 1
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
It is usually cheaper than bank borrowing for highly rated names and can be issued quickly in size.
Rollover risk. Paper matures constantly and must be refinanced, which fails precisely when credit conditions tighten.