Discount factor with an annually-compounded rate

Formula

Discount factor with an annually-compounded rate formula
DFT
discount factor
r
annually-compounded rate
T
time to cashflow (in years)

Formula description

Discounting is a financial mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee. The discount factor, DF(T), is the factor by which a future cash flow must be multiplied in order to obtain the present value.rnIn the case where the only discount rate you have is not a zero-rate but an annually-compounded rate would use an annually-compounded discount factor.

Calculator (how to use calculator?)

Discount factor with an annually-compounded rate formula
r
T
DFT
Precision

Formula code








References

  1. Wikepedia:Discount_factor.

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