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Present Value Discount Factor

This topic has 1 reply, 2 voices, and was last updated 7 years ago by Ken Garrett.

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May 30, 2017 at 3:08 pm #389034
wishgirlgy
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June 2012 Question 1 has a discount factor of 12.5%. How do you calculate the present value for that?
May 30, 2017 at 4:32 pm #389050
Ken Garrett
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For year 1: 1/1.125
For year 2: 1/1.125^2 (where ^ means raise to the power)
For year 3: 1/1,125^3
Etc
Look at the lectures for Chapter 23 of F2 if you need more.
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