Discount factor for 3 years at 10% is:

Answer 1

To calculate the discount factor for 3 years at a 10% interest rate, you can use the formula:

Discount Factor = 1 / (1 + Interest Rate)^Number of Years

Plugging in the values:

Discount Factor = 1 / (1 + 0.10)^3

Discount Factor = 1 / (1.10)^3

Discount Factor = 1 / 1.331

Discount Factor ≈ 0.7513