Rescale a discount rate between two time frames.
rescale_discount_rate(x, from, to)
| x | Discount rate to rescale. |
|---|---|
| from | Original time period. |
| to | Final time period. |
Rate rescaled under the assumption of compound discounting.
Continuous discounting is assumed, i.e. when converting a long-term discount rate into a short-term rate, we assume that a partial gain from one short term is multiplicatively discounted in all following short terms. At the same time, we assume the short-term rate is time-invariant.
## 1% monthly interest rate to annual rescale_discount_rate(0.01, 1, 12)#> [1] 0.126825## 3% annual discount rate to (approximately) weekly rescale_discount_rate(0.03, 52, 1)#> [1] 0.0005686001