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Hi john,
How do you calculate the discount factor values to use if for example the cost of capital is 4.2% as the table only gives for whole values,Thanks
Hi! If it was not given a whole values, use this formula: 1/(1+r)^n where r is interest rate; not is years
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If you do use the discount factor to calculate MV, yield or interest of a bond, then you must use the formula above.
But if it is for a general NPV, you are allowed to round to the nearest whole number.
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