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In response to "go for it! -- nm" by cupixie

What % should I say to discount the future salary? Current interest rate? Loan rate? -- nm

Posted by James Bond (aka Igor) (aka Igor) Feb 9 '11, 16:52

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Responses:

cost of capital. I'd use 12.9% per year for me. -- nm - amanda "internet" jones Feb 9, 17:00 18
- (Can you explain a little more) -- nm - James Bond (aka Igor) Feb 9, 17:01 17
  - it's the annual value of the next-best investment of the cash. - amanda "internet" jones Feb 9, 17:07 13
    - fwiw, the major miners use 6% for developed world, 10% for places with high country risk, and that's based on about a century of operational history. -- nm - mafic Feb 9, 17:38 2
      - sure, because their roi is predictable based on history, and their portfolios are varied enough to mitigate some risk. - amanda "internet" jones Feb 9, 17:46 1
        
        absolutely. I'm just always fairly conservative with it. - mafic Feb 9, 17:52
    - Why can't you say: I will have $10 in my account in 5 years. For me to get $10 in 5 years, I would need $9.06 in my account at 2% interest. - James Bond (aka Igor) Feb 9, 17:10 8
      - sure, you can. but what interest rate do you use? isn't that what you asked? - amanda "internet" jones Feb 9, 17:19 7
        
        Oohhhh.. I see now. Sorry I got confused. You used the interest rate from credit cards. While I was thinking of an like a CD account. - James Bond (aka Igor) Feb 9, 17:23 3
        
        so like what I'm saying is "what would you get for the money if not spending it on tuition and interest? -- nm - amanda "internet" jones Feb 9, 17:24 2
        
        Right. Thank you. -- nm - James Bond (aka Igor) Feb 9, 17:25
        
        oops. it's a combination of the cost of your debt and your equity. I use credit card rates for me. YMMV. -- nm - amanda "internet" jones Feb 9, 17:25
        
        just give him the bottom line! -- nm - cupixie Feb 9, 17:20 2
        
        he's using like a bank interest rate. he has his answer. I use different numbers because I make different assumptions and have different risk toleranc -- nm - amanda "internet" jones Feb 9, 17:22 1
        
        Yes, makes sense. Thank you. -- nm - James Bond (aka Igor) Feb 9, 17:24
    - wiki says it well. - amanda "internet" jones Feb 9, 17:09
  - dumb it down for him, cakey -- nm - cupixie Feb 9, 17:04 2
    - I don't see you replying so I take it addition and subtraction are the far limits of your ability. :P -- nm - James Bond (aka Igor) Feb 9, 17:05 1
      - i'm totally mathtarded. it's true -- nm - cupixie Feb 9, 17:17
I am guessing current interest. -- nm - James Bond (aka Igor) Feb 9, 16:59

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What % should I say to discount the future salary? Current interest rate? Loan rate? -- nm

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