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## How do you find the discount rate?

Discount Rate = (Future Cash Flow / Present Value) ^{1}^{/}^{n} – 1

- Discount Rate = ($3,000 / $2,200)
^{1}^{/}^{5}– 1. - Discount Rate = 6.40%

## How do you find discount rate per period?

For example, to calculate discount factor for a cash flow one year in the future, you could simply divide 1 by the interest rate plus 1. For an interest rate of 5%, the discount factor would be 1 divided by 1.05, or 95%.

## What is an example of discount rate?

In this context of DCF analysis, the discount rate refers to the interest rate used to determine the present value. For example, $100 invested today in a savings scheme that offers a 10% interest rate will grow to $110.

## What is rate of discount?

The discount rate is the interest rate used to determine the present value of future cash flows in a discounted cash flow (DCF) analysis. This helps determine if the future cash flows from a project or investment will be worth more than the capital outlay needed to fund the project or investment in the present.

## How do you calculate discount rate in Excel?

If you know the original price and the discounted price, you can calculate the percentage discount.

- First, divide the discounted price by the original price. …
- Subtract this result from 1. …
- On the Home tab, in the Number group, click the percentage symbol to apply a Percentage format.