I sell a three year service contract at $1,000 per year. I want the customer to pay for the three years upfront. The "cost of money" in that country is 10% per annum. What is the total amount that I should deduct from the $3,000 upfront payment?

What is $1,000 per year * 10% discount* 3 years? Your answer is $300 so you can deduct $300 from the total amount due, which will be $2,700 upfront cost.