Discount Rate Calculator

Your details

PV/FV: find the rate that grows a present value to a future value. CAPM: estimate the cost of equity capital. WACC: blend equity and debt costs into one discount rate.
The starting investment or current market price.
USD
The ending value - what the investment grows to.
USD
Time span between PV and FV, in the chosen compounding frequency.
years
How often interest compounds. Annual gives the effective annual rate. Continuous uses the natural logarithm.
Currency
Discount rateHigh rate
12.47%

The annual discount rate for the selected method

Periodic rate12.4683%
Total return60%
12.47% %
Very low<4Low4-8Moderate8-12High12-18Very high18+

Implied annual discount rate: 12.47%

  • An investment of 10,000 growing to 16,000 over 4 periods implies a 12.47% annual rate.
  • The cumulative gain over the full term is 60.0%.
  • Use this rate as a hurdle rate: any project earning more than this is adding value in real terms.
  • Compounding frequency matters for bonds and savings accounts. Switching from annual to monthly compounding noticeably raises the effective annual rate.

Next stepPlug this rate into a DCF or NPV model to evaluate future projects against the same benchmark.

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