Work out discount factor instantly with clear inputs, formula shown and shareable results.
A discount factor converts a future sum into today's money. It is simply v^n = 1/(1+r)^n, and multiplying any future cash flow by it gives the present value that would grow into that cash flow at the same rate.
Discount factor
v^n = 1 / (1 + r)^n; PV = FV × v^n
Because money available today can earn interest, a pound arriving later is worth less than a pound now.
No. Use the rate per period that matches your periods — monthly rate with months, quarterly rate with quarters.