Title Delivering the lowest B2C monthly price and highest value proposition to Merchant. Introduction

Subscription service cost

Subscription service cost is calculated by deducting the sum of retail prices from the Subscription amount.

Since we know that MacBook’s retail price is 1500 and the warranty’s retail price is 300, we understand that the sum of those prices is 1800.

The subscription amount was 2201,56. This means that the Subscription service cost equals 2201,56 - 1800 = 401,56

VAT on subscription service cost

Fairown will return VAT of the subscription service cost to the merchant as well.

This is calculated by using the following formula:

Subscription service cost - (subscription service cost / (1 - VAT%).

When we add values to the formula we get the VAT of the subscription service cost : 401,56 * 0,19= 76,29 euros.

Subscription residual value

Subscription residual value is the residue of the subscription amount which is left after the renewal time comes.

In the event of renewal this is paid to the bank by Fairown.

In order to calculate it, we should use the following formula:

Subscription residual value = (Subscription period - renewal period) x Total monthly payment

In our example it equals (46 - 36) x 47.86 = 478,6

Calculations in case of prepayment

Now let's say the customer wants to do some prepayment (PP). This can be e.g. downpayment, gift card, trade in etc.

In our case, as an example, the customer wants to use a 200 € worth of gift card.

This amount will be deducted from the previously found subscription amount (2201,56).

Loan amount after PP = Subscription amount - prepayment amount

In our example