Discount factor and ENaira: Difference between pages

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imported>Doug Williamson
(Link with Expected credit loss page.)
 
imported>Doug Williamson
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'''1.'''
{{lowercase}}''Central bank digital currencies - Nigeria.''


(DF).
The eNaira is a central bank digital currency issued by the Central Bank of Nigeria (CBN), launched in 2021.


The number less than one which we multiply a single future cash flow by, to work out its present value as:
Also written ''e-Naira''.


PV = DF x future cashflow.
The periodic discount factor is calculated from the periodic [[yield]] as:
DF = (1 + periodic yield)<SUP>-n</SUP>
Commonly abbreviated as DF(n,r) ''or'' DF<SUB>n,r</SUB>
Where:
n = number of periods.
r = periodic yield (or periodic cost of capital).
<span style="color:#4B0082">'''Example 1: Discount factor calculation'''</span>
Periodic yield or cost of capital (r) = 6%.
Number of periods in the total time under review (n) = 1.
Discount factor = (1 + r)<sup>-n</sup>
= 1.06<sup>-1</sup>
= 0.9434.


== See also ==
* [[Central bank digital currency]]  (CBDC)
* [[ISO currency codes]]
* [[Naira]]
* [[Nigeria]]


The greater the time delay, the smaller the Discount Factor.
[[Category:Accounting,_tax_and_regulation]]
 
[[Category:The_business_context]]
 
[[Category:Cash_management]]
<span style="color:#4B0082">'''Example 2: Increasing number of periods delay'''</span>
[[Category:Financial_products_and_markets]]
 
[[Category:Liquidity_management]]
Periodic yield or cost of capital = 6%.
[[Category:Technology]]
 
The number of periods delay increases to 2.
 
Discount factor = (1 + r)<sup>-n</sup>
 
= 1.06<sup>-2</sup>
 
= 0.8890.
 
''(A smaller figure than the 0.9434 we calculated previously for just one period's delay.)''
 
 
 
'''2.'''
 
Historically, the yield or cost of capital used for the purpose of calculating Discount Factors, as defined above. 
 
For example the 6% rate applied in definition 1. above.
 
 
== See also ==
* [[Annuity factor]]
* [[Certificate in Treasury Fundamentals]]
* [[Certificate in Treasury]]
* [[Compounding effect]]
* [[Compounding factor]]
* [[Cumulative Discount Factor]]
* [[Day count conventions]]
* [[Expected credit loss]]
* [[Factors]]
* [[Present value]]

Latest revision as of 23:26, 26 December 2022

Central bank digital currencies - Nigeria.

The eNaira is a central bank digital currency issued by the Central Bank of Nigeria (CBN), launched in 2021.

Also written e-Naira.


See also