Moneychimp discount rate
This is because a dollar in the present will grow to be more than a dollar at a future date due to inflation and investment returns. This total growth rate is the interest rate of an investment. The unknown interest rate of an investment can be calculated if its initial present value, expected future value and years of investment are given. For a company having average 3 % change in book value per year, CBV is 2000, cash taken out of business is 1000 and discount rate is 5 %, then find the intrinsic value for 10 years = 1000 * ( 1 - ( 1 / ( 5 / 100 + 1 ) 10 ) ) / (5 / 100 ) + 2000 * ( (3/100) + 1) 10 / ( 5 / 100 + 1 ) 10