Modern Finance DiscountFactor

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DiscountFactor

Returns what one unit due after a whole number of periods is worth today.

Syntax

DiscountFactor( ratePerPeriod, periods )

Examples

#import "std/money"
using money

'' 1 / ( 1 + i )^n -- what a pound at period n is worth today.
dim as Decimal i = DecimalParse( "0.005" ).Value( )

print DiscountFactor( i, 0 ).Value( ).ToString( )           '' 1
print DiscountFactor( i, 12 ).Value( ).ToStringFixed( 8 )   '' 0.94190534

'' It is the reciprocal of GrowthFactor, so the two multiply to one.
dim as Decimal g = GrowthFactor( i, 120 ).Value( )
dim as Decimal v = DiscountFactor( i, 120 ).Value( )
print ( g * v ).Round( 20 ).ToString( )                     '' 1.00000000000000000000

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Library: Finance
Category: Finance
Documented under: Nothing Becomes A Keyword
Source: pkg/std/money/fincore.tiko in the tiko repository.