How do I find the discount factor if it comes example 8.6% for 1to 4years. If its simply 8% then I can see that. The answer are 0.921,0.848,0.781,0.791. I am not getting after finding 8% for the following year what else need to be added. Thanks
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AFMpls help with discount factor
12y ago#1I don't understand your last sentence.
However if you need the discount factor at 8.6% then to be exact you need to use the formula (which is given at the top of the sheet of discount factors).
However, usually just using the nearest % and then the tables will still get full marks.
(If it is an annuity then it is obviously easier to use the annuity factor.)
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