Category:Discount Factors

This category contains results about Discount Factors.
Definitions specific to this category can be found in Definitions/Discount Factors.

Let $P$ be a principal invested under compound interest with an interest rate $r$ over a number of conversion periods $n$.

The discount factor of $P$ is defined as:

$\paren {1 + r}^{-n}$

This is the amount of principal which will increase to $1$ unit after $n$ conversion periods at interest rate $r$.