# How do you calculate discount factor discount rate?

Contents

## How do you calculate discount rate?

How to calculate discount and sale price?

1. Find the original price (for example \$90 )
2. Get the the discount percentage (for example 20% )
3. Calculate the savings: 20% of \$90 = \$18.
4. Subtract the savings from the original price to get the sale price: \$90 – \$18 = \$72.
5. You’re all set!

## Is discount rate and discount factor the same?

The discount factor and discount rate are closely related, but while the discount rate looks at the current value of future cash flow, the discount factor applies to NPV. With these figures in hand, you can forecast an investment’s expected profits or losses, or its net future value.

## What is the discount factor rate?

The discount factor is a weighting term that multiplies future happiness, income, and losses in order to determine the factor by which money is to be multiplied to get the net present value of a good or service.

## How do you find discount factor in NPV?

Formula for the Discount Factor

NPV = F / [ (1 + r)^n ] where, PV = Present Value, F = Future payment (cash flow), r = Discount rate, n = the number of periods in the future).

## How do you calculate discount factor in Excel?

Discount Factor = 1 / (1 * (1 + Discount Rate)PeriodNumber)

1. Discount Factor = 1 / (1 * (1 + 10%) ^ 2)
2. Discount Factor = 0.83.
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