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How to find the discount factor of a range of years using calculator. Example, discount factor of year (1-5) @ 10%. Please not the discount factors of each of the years differently?
you mean the annuity? the formula is at the top of the annuity tables for example in the F9 paper
1-(1+r)-n/r
the -n bit is to the power of -n but I can’t show that as a smaller -n raised up
r= discount rate ie 0.1 for your 10%
n= number of periods ie 5 for your query
so:1-(1+0.1) to the power of -5/0.1 = 3.791
ajip: Do not ask this kind of question in the general forum – ask it in the relevant paper forum (which for this question is Paper F2).
And watch the free lectures – our lectures cover everything needed to be able to pass Paper F2 well ( and obviously cover in detail exactly what you have asked ).
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