Answer to Question #85045 in Finance for Edmund Cox

Question #85045
If American Express, in their investor relations report describe their worldwide transaction volume as $1.1 trillion, and say their average discount rate is 2.43%, how do they arrive at a discount revenue of around $19 billion, as opposed to around $27 billion (i.e. 2.43% of 1.1 trillion)?
1
Expert's answer
2019-02-14T11:24:08-0500

If American Express, in their investor relations report describe their worldwide transaction volume as $1.1 trillion, and say their average discount rate is 2.43%, then they can arrive at a discount revenue of around $19 billion, as opposed to around $27 billion (i.e. 2.43% of 1.1 trillion) if they use lower than average discount rate to calculate their discount revenue.


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