Document Type
Article
Publication Date
1995
Abstract
Focuses on the quantification of the magnitude of error when the mathematical function for present value is ignored and interpolation is used to determine the discount factor in the time valuation of cash flows. Length of discounting period; Linear interpolation between table present value factors for periodic interest rate and same interest rate plus one per cent; Sensitivity of maximum error timing to interest rate.
Recommended Citation
Mangiero, George A., and Susan M. Mangiero. "Quantifying Time Value Errors." Financial Services Review 4.1 (1995): 23