The formula for calculating the discount factor in Excel is the same as the Net Present Value (NPV formula). The formula is as follows: Factor = 1 / (1 x (1 + Discount Rate) ^ Per… See more

Here is an example of how to calculate the factor from our Excel spreadsheet template. In period 6, which is year number 6 that we are discounting, the number in the formula would be a… See more

Analysts will use discount factors when performing financial modeling in Excelif they want to have more visibility into the NPV formula and to better illustrate the effect of dis… See more

Using a discount factor allows you to specify exactly how many days are in each period. You can do this by using specific dates in each time period and taking the difference … See more