The interest rate your lender gives you isn't the true cost of your mortgage. Learn how to calculate your effective interest rate, including any discount points.

r = Interest rate, also known as discount rate (%) n = Number of payment periods Here’s how the formula looks if you’re applying it to an ordinary annuity (also called a deferred annuity): ...

The discount factor should be adjusted higher for projects with riskier and less certain cash flows. Long-term projects should use a higher discount rate than short-term projects. Advertisement ...

How to Calculate Future Cash Flow Discount. ... (1 + Discount)^Periods As an example, the first year's return of $30,000 can be discounted by a 3 percent rate of inflation.