Ratio vs exponential discounting
| Does anybody have a good trick to memorize when we're supposed to use a ratio (i.e. i x 90/360) vs an exponent (1+i)^.25-1 for discounting rates? It appears to me that the calculation is used interchangeably. Although, the result is quite close when used with large dollar amounts, the answer might vary due to rounding. For example, let i=4%. Ratio = 1%, exponent = 0.9853%. |
发表于 2011-7-11 20:06
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