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Discounting factor

This topic has 1 reply, 2 voices, and was last updated 3 months ago by Stephen Widberg.

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April 15, 2022 at 7:42 am #653337
kellyling0916
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Hi ,did anyone know how to calculate the discount factor?

I did search for the formula of this Factor = 1 / (1 x (1 + Discount Rate) ^ Period Number)

however when I refer to Open tuition notes SBR (September 2021 to June 2022 exams )example answer 3 convertible debentures the formula seems not correct .How to get the answer ?

1/(1 x(1+6%)6^1=0.142 (my calculation
but in the year 1 answer is0.943 in year 1
April 15, 2022 at 7:47 am #653340
Stephen Widberg
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- Topics: 10
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Year 1 = 1/1.06^1
Year 2 = 1/1.06^2

and so on
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