Discounting Equations(Incorporated in the DCF Program)

• Discount factors for each period I using spreadsheet notation where I is the period being evaluated, r is the discount rate (or cell), and EXP is the natural base e logarithm

  • End-of-(period): 1/(1+r)^I
  • Continuous: (EXP(r)-1)/(r*EXP(r*I))
  • Middle-of-(period): ((1/(1+r)^(I-1))+(1/(1+r)^(I)))/2

Copyright © 1991-1997, Ray Martin

Previous slide

Next slide

Back to first slide

View graphic version