Discount Factor Table and Calculators:

Independent Variables:
Interest Rate (r):
Investment Periods (n):

5%
10

Discount
Factor ID

Fund Type

Value Conversion

Discount Factor
Value (d)

Lump Sum

PV -> FV

1.6289

Lump Sum

FV -> PV

0.6139

Annuity

A -> FV

12.5779

Annuity

A -> PV

7.7217

Annuity

FV -> A

0.0795

Annuity

PV -> A

0.1295

Note:

To take into the effect of interest compounding and discounting in investment analysis, we often need
a fund or funds from one type to another, from present value to future value, for example. Using disco
need for complicated fomulas. The table presents six common discount factors, along with their math
formula.
Change the values of interest rate and the number of investment periods to get their corresponding d
To use the discount factor, follow this simple formula: Y=dX, where Y is value to be converted to, X is t

Discount Factor Formula

Discount Factor Formula

in Excel

(1+r)n

=FV(r,n,0,-1)

(1+r)-n

=PV(r,n,0,-1)

((1+r)n-1)/r

=FV(r,n,-1)

((1+r)n-1)/(r(1+r)n)

=PV(r,n,-1)

r/((1+r)n-1)

=PMT(r,n,0,-1)

r(1+r)n/((1+r)n-1)

=PMT(r,n,-1)

in investment analysis, we often need to convert the value of

future value, for example. Using discount factors avoids the
discount factors, along with their math formula and Excel

nt periods to get their corresponding discount factors.

ere Y is value to be converted to, X is the value to be converted from, and d is one of the discount factor in the

f the discount factor in the following table.

Calculating Future Value with and without Compounding:

PV
3000
FV
$7,781.23
r
10%
n
10

$9,000
$8,000
$7,000
$6,000
$5,000

FV with Compounding
FV without Compounding
1
3300.00
3300.00
2
3630.00
3600.00
3
3993.00
3900.00
4
4392.30
4200.00
5
4831.53
4500.00
6
5314.68
4800.00
7
5846.15
5100.00
8
6430.77
5400.00
9
7073.84
5700.00
10
7781.23
6000.00

$4,000
$3,000
$2,000
$1,000
$0
1

FV with Compounding

The following notes are from Microsoft Excel Help:

FV function

Returns the future value of an investment based on periodic, constant payments and a consta
Syntax
FV(rate,nper,pmt,pv,type)

For a more complete description of the arguments in FV and for more information on annuity f
Rate

is the interest rate per period.

Nper

is the total number of payment periods in an annuity.

Pmt
Pv
Type

is the payment made each period; it cannot change over the life of the annuity. Typical

is the present value, or the lump-sum amount that a series of future payments is worth r

is the number 0 or 1 and indicates when payments are due. If type is omitted, it is ass

Set
type
equal
to

If payments are due

0 At the end of the period

1 At the beginning of the period

Remarks

Make sure that you are consistent about the units you use for specifying rate and nper. If yo
For all the arguments, cash you pay out, such as deposits to savings, is represented by ne

compound
interest

FV with Compounding

10

FV without Compounding
simple
interest

ayments and a constant interest rate.

formation on annuity functions, see PV.

of the annuity. Typically, pmt contains principal and interest but no other fees or taxes. If pmt is omitted, you

e payments is worth right now. If pv is omitted, it is assumed to be 0 (zero), and you must include the pmt

pe is omitted, it is assumed to be 0.

ing rate and nper. If you make monthly payments on a four-year loan at 12 percent annual interest, use 12
, is represented by negative numbers; cash you receive, such as dividend checks, is represented by positiv

es. If pmt is omitted, you must include the pv argument.

u must include the pmt argument.

annual interest, use 12%/12 for rate and 4*12 for nper. If you make annual payments on the same loan, us
s represented by positive numbers.

nts on the same loan, use 12% for rate and 4 for nper.

Plot

Number of Earthworms
1
2
2
5
3
6
4
6
5
7
6
9
7
10
8
11
9
12
10
15
Population Size (N):
200
Sample Size (n):
10
Estimated Variance of the Mean:
with fpc:
1.39
w/o fpc:
1.47
Estimated Std. Error of the Mean:
with fpc:
1.18
w/o fpc:
1.21

Number of Earthworms
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Confidence Level(95.0%)
Confidence Level with fpc:
Upper Bound:
Lower Bound:

of Earthworms
8.3
1.21
8
6
3.83
14.68
-0.27
0.16
13
2
15
83
10
2.74
2.67
11.04
5.56

Plot

Number of Earthworms
1
2
2
5
3
6
4
6
5
7
6
9
7
10
8
11
9
12
10
15
Population Size (N):
200
Sample Size (n):
10
Estimated Variance:
with fpc:
55775.56
w/o fpc:
58711.11
Estimated Std. Error:
with fpc:
236.17
w/o fpc:
242.30

Number of Earthworms
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count
Confidence Level(95.0%)
Population Total:
Population Total Bound:
with fpc:
w/o fpc:

of Earthworms
8.3
1.21
8
6
3.83
14.68
-0.27
0.16
13
2
15
83
10
2.74
1660
534.25
548.13

Plot

Number of Earthworms
1
2
2
5
3
6
4
6
5
7
6
9
7
10
8
11
9
12
10
15

Plot

Number of Earthworms
1
2
2
5
3
6
4
6
5
7
6
9
7
10
8
11
9
12
10
15
Average
8.3
Median
8
Mode
6
Variance
14.68
Std. Dev
3.83

Number of Earthworms
Mean
Standard Error
Median
Mode
Standard Deviation
Sample Variance
Kurtosis
Skewness
Range
Minimum
Maximum
Sum
Count

8.3
1.21
8
6
3.83
14.68
-0.27
0.16
13
2
15
83
10.00

Years of Education

Frequency

0
6

10

12

Year

14

16

18

80

70

60

50

AGE

40

EDUC

30

20

10

0
0

100

200

300

400

500

600

700

OBS

ACRES
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

AGE
190
135
275
185
340
575
210
95
55
210
280
0
120
80
600
415
0
395
480
180
60
0
108
225
295

EDUC
50
59
39
49
39
32
51
55
67
28
35
68
55
59
30
29
62
27
31
52
63
61
61
46
37

COUNTY
14 Cook
14 Haynes
16 Haynes
14 Haynes
12 Cook
16 Haynes
14 Cook
8 Haynes
8 Cook
12 Haynes
14 Haynes
8 Cook
12 Haynes
12 Cook
18 Cook
18 Haynes
8 Haynes
16 Haynes
16 Cook
12 Cook
6 Haynes
12 Haynes
12 Haynes
12 Cook
16 Cook

OBS

ACRES
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

AGE
190
135
275
185
340
575
210
95
55
210
280
0
120
80
600
415
0
395
480
180
60
0
108
225
295

EDUC
50
59
39
49
39
32
51
55
67
28
35
68
55
59
30
29
62
27
31
52
63
61
61
46
37

COUNTY
14 Cook
14 Haynes
16 Haynes
14 Haynes
12 Cook
16 Haynes
14 Cook
8 Haynes
8 Cook
12 Haynes
14 Haynes
8 Cook
12 Haynes
12 Cook
18 Cook
18 Haynes
8 Haynes
16 Haynes
16 Cook
12 Cook
6 Haynes
12 Haynes
12 Haynes
12 Cook
16 Cook

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.901942
R Square 0.813499
Adjusted R 0.796544
Standard Er77.04932
Observatio
25
ANOVA
df
Regression
Residual
Total

2
22
24

Coefficients
Intercept 400.2317
AGE
-8.109141
EDUC
15.97356

SS
MS
F
Significance F
569686.3 284843.2 47.98088 9.50E-009
130605.1 5936.597
700291.4
Standard Error t Stat
P-value Lower 95%Upper 95%
Lower 95.0%
Upper 95.0%
176.344 2.269607 0.033381 34.51655 765.9468 34.51655 765.9468
1.85248 -4.377451 0.00024 -11.95095 -4.267332 -11.95095 -4.267332
7.686956 2.078009 0.049583 0.031791 31.91533 0.031791 31.91533

OBS

ACRES
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

AGE
190
135
275
185
340
575
210
95
55
210
280
0
120
80
600
415
0
395
480
180
60
0
108
225
295

EDUC
50
59
39
49
39
32
51
55
67
28
35
68
55
59
30
29
62
27
31
52
63
61
61
46
37

COUNTY
14 Cook
14 Haynes
16 Haynes
14 Haynes
12 Cook
16 Haynes
14 Cook
8 Haynes
8 Cook
12 Haynes
14 Haynes
8 Cook
12 Haynes
12 Cook
18 Cook
18 Haynes
8 Haynes
16 Haynes
16 Cook
12 Cook
6 Haynes
12 Haynes
12 Haynes
12 Cook
16 Cook

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.881415
R Square 0.776893
Adjusted R 0.767192
Standard Er82.41994
Observatio
25
ANOVA
df
Regression
Residual
Total

1
23
24

Coefficients
Intercept 746.9159
AGE
-11.10962

SS
MS
F
Significance F
544051.4 544051.4 80.08945 5.95E-009
156240.1 6793.047
700291.4
Standard Error t Stat
P-value Lower 95%Upper 95%
Lower 95.0%
Upper 95.0%
61.10762 12.22296 1.53E-011 620.5052 873.3267 620.5052 873.3267
1.241399 -8.949271 5.95E-009 -13.67765 -8.541589 -13.67765 -8.541589

OBS

ACRES
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

AGE
190
135
275
185
340
575
210
95
55
210
280
0
120
80
600
415
0
395
480
180
60
0
108
225
295

EDUC
50
59
39
49
39
32
51
55
67
28
35
68
55
59
30
29
62
27
31
52
63
61
61
46
37

COUNTY
14 Cook
14 Haynes
16 Haynes
14 Haynes
12 Cook
16 Haynes
14 Cook
8 Haynes
8 Cook
12 Haynes
14 Haynes
8 Cook
12 Haynes
12 Cook
18 Cook
18 Haynes
8 Haynes
16 Haynes
16 Cook
12 Cook
6 Haynes
12 Haynes
12 Haynes
12 Cook
16 Cook

SUMMARY OUTPUT
Regression Statistics
Multiple R
0.80688
R Square 0.651056
Adjusted R 0.635884
Standard Er 103.075
Observatio
25
ANOVA
df
Regression
Residual
Total

1
23
24

Coefficients
Intercept
-319.86
EDUC
42.20156

SS
MS
F
Significance F
455928.8 455928.8 42.91312 1.10E-006
244362.6 10624.46
700291.4
Standard Error t Stat
P-value Lower 95%Upper 95%
Lower 95.0%
Upper 95.0%
84.99785 -3.763154 0.001011 -495.6914 -144.0286 -495.6914 -144.0286
6.44219 6.55081 1.10E-006 28.87488 55.52825 28.87488 55.52825

OBS

ACRES
1
5
7
9
12
14
15
19
20
24
25
2
3
4
6
8
10
11
13
16
17
18
21
22
23

AGE
190
340
210
55
0
80
600
480
180
225
295
135
275
185
575
95
210
280
120
415
0
395
60
0
108

EDUC
50
39
51
67
68
59
30
31
52
46
37
59
39
49
32
55
28
35
55
29
62
27
63
61
61

COUNTY
14 Cook
12 Cook
14 Cook
8 Cook
8 Cook
12 Cook
18 Cook
16 Cook
12 Cook
12 Cook
16 Cook
14 Haynes
16 Haynes
14 Haynes
16 Haynes
8 Haynes
12 Haynes
14 Haynes
12 Haynes
18 Haynes
8 Haynes
16 Haynes
6 Haynes
12 Haynes
12 Haynes

t-Test: Two-Sample Assuming Equal Variances

Mean
Variance
Observations
Pooled Variance
Hypothesized Mean Difference
df
t Stat
P(T<=t) one-tail
t Critical one-tail
P(T<=t) two-tail
t Critical two-tail

Variable 1
Variable 2
241.3636363636 203.7857142857
32485.45454545 28210.64285714
11
14
30069.25663467
0
23
0.5378507416
0.2979233735
1.7138715171
0.5958467469
2.0686575986

t-Test: Two-Sample Assuming Unequal Variances

Mean
Variance
Observations
Hypothesized Mean Difference
df
t Stat
P(T<=t) one-tail
t Critical one-tail
P(T<=t) two-tail
t Critical two-tail

Variable 1
Variable 2
241.3636363636 203.7857142857
32485.45454545 28210.64285714
11
14
0
21
0.5331264232
0.2997717033
1.7207428715
0.5995434066
2.0796138371

t-Test: Two-Sample Assuming Equal Variances

Variable 1
Variable 2
Mean
48.1818181818 46.78571
Variance
172.9636363636 205.1044
Observations
11
14
Pooled Variance
191.1301524562
Hypothesized Mean Di
0
df
23
t Stat
0.2506360238
P(T<=t) one-tail
0.4021604757
t Critical one-tail
1.7138715171
P(T<=t) two-tail
0.8043209514
t Critical two-tail
2.0686575986

t-Test: Two-Sample Assuming Equal Variances

Mean
Variance
Observations
Pooled Variance
Hypothesized Mean Di
df
t Stat
P(T<=t) one-tail
t Critical one-tail
P(T<=t) two-tail
t Critical two-tail

Variable 1
Variable 2
12.9090909091 12.71429
9.8909090909 12.06593
11
14
11.1202710333
0
23
0.1449883821
0.4429915593
1.7138715171
0.8859831186
2.0686575986

OBS

ACRES
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

AGE
190
135
275
185
340
575
210
95
55
210
280
0
120
80
600
415
0
395
480
180
60
0
108
225
295

EDUC
50
59
39
49
39
32
51
55
67
28
35
68
55
59
30
29
62
27
31
52
63
61
61
46
37

COUNTY
14 Cook
14 Haynes
16 Haynes
14 Haynes
12 Cook
16 Haynes
14 Cook
8 Haynes
8 Cook
12 Haynes
14 Haynes
8 Cook
12 Haynes
12 Cook
18 Cook
18 Haynes
8 Haynes
16 Haynes
16 Cook
12 Cook
6 Haynes
12 Haynes
12 Haynes
12 Cook
16 Cook

6
8
10
12
14
16
18

ACRES
ACRES
AGE

1
-0.881415

AGE
1

Years o
9

More

AGE

80

70
Frequency

60
50Education
Years of
40
30
20
10
0
0

6
8
10
12
14
16
100
18

More

Bin Range
6
7
8
9
10
11
12
13
14
15
16
17
18

Frequency

200

1
4
0
8
5
5
300
2
0

5
4
AGE

3
2
1
0
6
400

500

600

700

Years of Education
9
8
7
6
5
4
AGE

3
2
1
0
6

10

12

14

16

18

700

Bin

Frequency
6
1
7
0
8
4
9
0
10
0
11
0
12
8
13
0
14
5
15
0
16
5
17
0
18
2

Histogram
10
Frequency

Frequency

Bin

More

Frequency