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I wonder for exponential discounting method to do the discount cash flow, may I doing it right as the following screenshot from Excel, assuming the discount rate is 4%?

Thanks!

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closed as off-topic by LocalVolatility, Alex C, Quantuple, Luigi Ballabio, Bob Jansen Feb 6 '17 at 13:13

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  • $\begingroup$ Why \$G\$8-C\$8 ? Shouldn't just be C\$8 ? $\endgroup$ – Alex C Feb 5 '17 at 23:17
  • $\begingroup$ That's the part where I'm confused about, because it says tn = the time until the nth cash flow. $\endgroup$ – Paul Ellen Feb 5 '17 at 23:37
  • $\begingroup$ The cash flows that are close to the present in time have to be discounted only a little, those that are far in time have to be discounted (reduced in value) more. You seem to be doing the opposite. $\endgroup$ – Alex C Feb 5 '17 at 23:52
  • $\begingroup$ Then I suppose the following will be how it should be done? imgur.com/a/48ZX7 $\endgroup$ – Paul Ellen Feb 6 '17 at 0:05
  • $\begingroup$ In discrete time with discrete compounding, the formula for the discount factor should be, using your notation: $\frac{1}{(1+r(t_n))^{t_n}}$. $\endgroup$ – Marie. P. Feb 6 '17 at 10:45
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Then I suppose the following will be how it should be done?

enter image description here

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