Discount factor for 3 years at 10% is:
To calculate the discount factor for 3 years at a 10% interest rate, you can use the formula:
Discount Factor = 1 / (1 + Interest Rate)^Number of Years
Plugging in the values:
Discount Factor = 1 / (1 + 0.10)^3
Discount Factor = 1 / (1.10)^3
Discount Factor = 1 / 1.331
Discount Factor ≈ 0.7513
To calculate the discount factor for 3 years at a 10% rate, you can use the formula:
Discount factor = 1 / (1 + discount rate)^number of years
In this case, the discount rate is 10% or 0.1, and the number of years is 3.
So, plugging these values into the formula, we get:
Discount factor = 1 / (1 + 0.1)^3
= 1 / (1.1)^3
= 1 / 1.331
≈ 0.7513
Therefore, the discount factor for 3 years at a 10% rate is approximately 0.7513.