Discount Factor (Future Value)

This is a decimal number that when multiplied by a future value will give the present value.

alt text

It is common to convert an interest rate into its corresponding discount factor.
When you have a discount factor you can multiply the cash flow by the discount factor to give its present value.


Simple Interest

alt text

Compounded Interest

alt text

Continuously Compounded

alt text

Discount Factor Curves



© 2022 Better Solutions Limited. All Rights Reserved. © 2022 Better Solutions Limited TopPrevNext