- This topic has 4 replies, 2 voices, and was last updated 12 years ago by .
Viewing 5 posts - 1 through 5 (of 5 total)
Viewing 5 posts - 1 through 5 (of 5 total)
- You must be logged in to reply to this topic.
OpenTuition recommends the new interactive BPP books for December 2024 exams.
Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA APM Exams › DISCOUNT FACTOR
Please how do you calculate the discount factor rate when the interest ( say 5%) is paid annually in areas for 5 years
Look up the tables or use
1/r(1- 1/(1+r)^n)
So for 6% and 5 years:
1/0.06(1 – 1/(1.06)^5) = 4.212
thank you sir, very much appreciated
Hello gromit, we have ( 1-1) which is equal to zero in the above formula which means the entire equation will be equal to zero if we are to use BODMAS IN SOLVING THE EQUATION.yOUR URGENT REPLY WILL BE APPRECIATED. Thank you
It’s not 1-1 it’s 1 – [1/(1.06)^5]
The terms in the square rackets are worked out first then subtracted from 1. (This how the original equation should be interpreted: multiply and divide before add and subtract is the normal precedence)