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The discounting factor for a 2-year investment at an interest rate of 15% can be calculated using the formula:
Discounting Factor = 1 / (1 + r)^n
Where:
– r = interest rate (expressed as a decimal)
– n = number of years
Plugging in the values:
r = 0.15 (15% expressed as a decimal)
n = 2 (2 years)
Discounting Factor = 1 / (1 + 0.15)^2
≈ 0.657
So, the discounting factor for a 2-year investment at an interest rate of 15% is approximately 0.657.