If the present value of $280 paid one-year from now is $250, what is the one-year discount factor?
To find the one-year discount factor, we need to use the formula:
Discount Factor = Present Value / Future Value
In this case, the present value is $250, and the future value is $280. So we can calculate the discount factor as follows:
Discount Factor = $250 / $280 = 0.892857...
Rounding this value to the nearest decimal place, we get the one-year discount factor as approximately 0.89.