
Cumulative Discount Factor TablesThe cumulative discount factor is a multiperiod 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 5year flow discounted starting at the end of year 1 at 5% is as follows:
$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 (singlecolumn or multiple):
 
See also ::::
Reserve Fund Internal Rate Of Return Payback Period 
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