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tippletine (march/june 18)

This topic has 1 reply, 2 voices, and was last updated 8 months ago by John Moffat.

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March 6, 2024 at 6:32 pm #702202
zaynnnn
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why when calculating the subsidized loan and tax shield we are deducting the annuity factor (4,329-0.952).
March 7, 2024 at 7:52 am #702263
John Moffat
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The tax is 1 year in arrears and is therefore an annuity from years 2 to 5.
To arrive at the discount factor for 2 to 5, we take the 5 year annuity factor and subtract the 1 year factor (so as to be left with the total from 2 to 5).
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