This function computes the present value factor for a given interest rate and time period.
Arguments
- rate
Numeric. The interest rate per period as a decimal (e.g., 0.05 for 5%).
- t
Numeric. The time period for which the present value factor is calculated.
Value
Numeric. The present value factor, which is the discount factor (1 + rate)^(-t)
Details
The present value factor is used to discount future cash flows to their present value.
Examples
# Calculate the present value factor for a 5% interest rate over 3 periods
get_pv(rate = 0.05, t = 3)
#> [1] 0.8638376
# Calculate the present value factor for a 10% interest rate over 1 period
get_pv(rate = 0.10, t = 1)
#> [1] 0.9090909