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Cumulative Discount Factor Tables

The cumulative discount factor is a multi-period discount factor. It is the sum of the present value factors for each of a series of periods at a given discount rate.

For example, the discount factors for a 5-year flow discounted starting at the end of year 1 at 5% is as follows:-

YearDFCDFPVCPV
10.95240.9524$4,762$4,762
20.90701.8594$4,535$9,297
30.86382.7232$4,319$13,616
40.82273.5459$4,114$17,730
50.78354.3294$3,917$21,647

  • DF = Discount Factor
  • CDF = Cumulative Discount Factor
  • PV = Present Value
  • CPV = Cumulative Present Value
  • Investment : $5,000
  • 4.3294 - This is the Cumulative Discount Factor.

    $5,000 * 4.3294 = $21,647

    In the above example, we calculated the Present Value of $5,000 at 5% over a 5 year period. Note when we summed the individual present values for each of the 5 years we get $21,647. When we multiply $5,000 x 4.3294 (the cumulative discount factor) we also get $21,647, not by coincidence.

    The Cumulative Discount Factor formula used is :- [1 - (1 + r) -t ] / r where r is the period interest rate expressed as a decimal and t is the number of periods involved. For example, 6% is expressed as 6/100 or 0.06; t is the number of years.

    This calculator allows you to create a table of Cumulative Discount factors derived from a range of interest rates over any time periods of your choosing. To produce a table (single-column or multiple):-

    • Input the number of columns
    • Input the starting percentage rate
    • Input the steps in percent change (if not consecutive)
    • Input the number of periods required
    • Press "Create The List"


    Cumulative Discount Factors

    <= No. Of Interest Columns =>
     
    <= Starting % =>       
            <= Step =>
     
     
    <= Number Of Years =>
     
     



  • See also =>>=>>
    Reserve Fund
    Internal Rate Of Return
    Payback Period


     If you want to use this Cumulative Discount Table Calculator on your web site, click HERE to get the code. Please don't forget to link back to us. 





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