# Questions tagged [discounting]

The change in value of a cash flow due to time applied at a given interest rate. Most investment formulas use this.

15 questions
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### Holding period return and YTM

Suppose I purchased a 2 year bond at par \$1000 paying 10% annually. Then the YTM is 10% but the holding period return would be 20%. Shouldn't those 2 values be the same since I am holding the bond to ...
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### Present value of a sequence of payments doubt

Assuming the nominal interest rate is greater than 0, rank the following three sequences of payments according to their present value: Sequence "A": \$90, \$100, \$110 Sequence "B": \$100, \$100, \$100 ...
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### Warren Buffet's calculation of the value of the company - very low discounting rate

I was read the book "The Buffett Way". The book claims that Warren Buffett uses a simple calculation to calculate the intrinsic value of a company. The regular way is to estimate future earnings &...
637 views

### How to deal with discount when invoice has multiple line items and multiple tax rates?

I am stumped at how to work out the tax for an invoice, when discounts are applied to invoices that have multiple line items with multiple tax rates? See my example invoice below: SomeItemOne(Tax: 20%...
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### Calculate order discount correctly when Tax is set per unit?

I'm sure this has been asked before, but I could not find an answer when I searched. Lets say I have an invoice with 3 line items shown below (All excluding tax) SomeItemOne - Cost:£2.45 | Qty:1 ...
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### How to consider capital assets in DCF analysis?

I'm calculating an enterprise value with the DCF analysis. In DCF I consider revenues - costs, and I also discount reinvestments. These reinvestments are to get more capital. How can I take into ...
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### DCF Terminal Value Discounted Twice?

Im looking at an example of calculating intrinsic value using DCF model. https://www.investopedia.com/university/dcf/dcf4.asp Here he calculates the terminal value as Then in his final calculation ...
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### Calculating NPV for future cash inflows [closed]

I have a question, where I am calculating the net present value of a project we are considering if it is beneficial or not. The project starts and the sales (cash inflows), don't start until a few ...
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### How can I calculate the spot rate for a given time period, given the discount rate for that same period?

I have a time period of .353 years, for which I have found a discount rate of .926142. How can I use this information, and only this information, to find the spot rate? Similarly, for a time period of ...
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### When does it make sense to buy an annual rather than a monthly pack?

My TV provider offers me a monthly package, but lets me prepay for a longer duration at lower price. Here are the options: ₹100 monthly ₹567 semi-annually ₹1,098 per annum ₹2,100 biennial All these ...
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### Given a certain yearly savings, how much can I spend on a capital improvement? NPV of future cash flow

I'm seeking a simple online calculator, or explicit instructions for a spreadsheet, for answering simple real-world scenarios like this: Our insurance company is offering a 30% discount on an \$8200/...
1k views

### How can I calculate yearly interest of my investment gain?

I'm trying to figure out the yearly interest of a potential investment. Lets say I invested \$10 000, 13 days later i cash out and I now have \$10 500. The interest here is 4,76% for 13 days. But can I ...
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### Why initial mortgage payments go towards the interest and not principal? [duplicate]

What is the reason that initial monthly payments towards a mortgage mostly goes to the interest and then later on, the payment goes to the principal? Is it designed this way for the benefit of the ...