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FRHow to calculate discount factors???????????

Nnadir14y ago
If the discount rate is 10% , how do we calculate the discount rate of the next 5 years????

Thanks in Advance
AAli14y ago#1
on calculator for Discount factor:
year 1

1.1^-1 = .909090
year 2
1.1^-2 = ..82644
for year 5
1.1^-5 = .62092

just change the power as per year..

:)
Nnadir14y ago#2
:(
No I don't got it. When I made 1.1 to the power of 1, I got 1.1
1.1 to the power of 2 = 1.21

But where do u got 1.1 ?????
AAli14y ago#3
discount factor is 10%. when you divide 10 by 100 you will get .1
here 1 is of formula..

and please check i have written - minus sign with power..
Nnadir14y ago#4
Thanks a lot I got it. :D
AAli14y ago#5
mention not,,
MikeLittleMikeLittleTutor14y ago#6
problem sorted
IIfy10y ago#7
thanks
HHameeda9y ago#8
And how to calculate cumulative discount factor for 4 years?
MikeLittleMikeLittleTutor9y ago#9
Calculate for year 1, year 2, year 3 and year 4 and add them all together In the exam, this will be given to you within the question
DCDaniel ChisomSupporter7y ago#10
But how it is calculated? cumulative discount factor. Thanks, Danny
DCDaniel ChisomSupporter7y ago#11
I got it.
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