Cash discount

It is discount offered by seller to those buyers who have purchased goods on credit and paid their debts promptly without any delay. For example a seller might charge $2000 for goods price but offer a discount of 5% if good are paid in short period of time or immediately

Seller may increase the discount rate with the decrease in payment period for example seller May gives buyer 5% for the payment in one month and 2% for 3 months