Description
Calculate policy discounted one year cost from explicit caller-supplied inputs.
A policy scenario makes eligibility bases, rates, thresholds, periods, and costs explicit. A calculated share or balance follows those assumptions. It does not select the governing policy or establish what caused an observed program outcome.
Calculate policy discounted one year cost from explicit caller-supplied inputs.
When to use this tool
Use it for policy discounted one year cost when the required inputs and conventions are already available.
How to use the tool and how it works
- Enter cost, annualRate, year. Use the stated units and boundary conventions.
- Run the calculation. Correct any input error before interpreting a result.
- Read discountFactor, presentCost. Inspect any known, defined, inclusion, or boundary flags before interpreting numeric values.
Require annualRate greater than minus one and nonnegative integer year. Return discountFactor=(1+annualRate)^(-year) and presentCost=cost/(1+annualRate)^year.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| cost | Cost | Required. Finite number. |
| annualRate | Annual compounded decimal rate, greater than minus one. | Required. Finite number; strictly above -1. |
| year | Nonnegative integer number of end-of-year discount periods. | Required. Safe integer; minimum 0. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| discountFactor | Discount Factor | Required. Finite number. |
| presentCost | Present Cost | Required. Finite number. |
{
"input": {
"cost": 110,
"annualRate": 0.1,
"year": 1
},
"output": {
"discountFactor": 0.9090909090909091,
"presentCost": 99.99999999999999
}
}Limitations and assumptions
- The rate is a decimal fraction and cost may be signed. This is one end-of-year compounded term, without selecting a social discount rate, inflation basis, or cash-flow schedule.
- The field tables describe structural bounds; the mechanics also state cross-field requirements. Malformed input shapes, disallowed keys, and invalid domains cause input errors. Results must remain finite and within the declared output contract. A successful false flag or zero placeholder is distinct from an error.
- Numeric arithmetic uses binary floating point. Exact comparisons have no hidden tolerance or decimal rounding; negative zero is exported as zero. Decimal-text integer operations retain the exactness specifically stated above.
Alternative or Complementary methods
For policy discounted one year cost, check the source records and the supplied rule before comparing the result with another method. Consult the applicable authoritative rule when deciding eligibility, legal timing, fees, or obligations.
References
Similar or alternative tools
- Policy Option Cost Weight
Return one supplied option cost contribution under an explicit nonnegative weight.
- Policy Rate Phase In Year Fraction
General rate proration over supplied half-open day-index bounds, without selecting statutory rules.