What is the five-year discount factor given a 15% annual discount rate? 0.497 0.750 0.625 0.250

Question

Question

What is the five-year discount factor given a 15% annual discount rate?

Answer 1

Answer #1

Given,

Annual discount rate = 15% or 0.15

Solution :-

Five-year discount factor = 1/(1 + annual discount factor)⁵

= 1/(1 + 0.15)⁵

= 1/(1.15)⁵

= 1/2.011357 = 0.497

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Answer 2

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