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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 of $5,000 discounted starting at the end of year 1 at 5% is as follows:-


  • 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 periods.

    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 Table

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