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The government's accountants define the cost of a student loan as the cash going out minus the projected repayments, the repayments being discounted using a complicated blend of rates on U.S. Treasury securities.
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In accounting terms, future pension liabilities are discounted using a corporate bond yield so that a higher bond weighting reduces the volatility of a scheme's funding ratio.
But the Detroit case shows the dangers of that reasoning.The alternative view, taken by actuaries on this side of the pond and by many economists, is that pensions are a debt-like liability, and thus should be discounted using a bond yield.
To obtain the risk-adjusted expected present value ({text{PV}}) as the central part of our objective function, the expected periodic process cash flows from Eq. (18) must be discounted using a risk-adjusted interest rate (i) and cumulated over the planning horizon (tau).
All costs were converted to 2008 U.S. dollars using the Consumer Price Index for Medical Care Services [47], and future costs were discounted using a 3% annual rate in the base case [48].
Costs were discounted using a 3% annual rate.
Total cost will be discounted using a 6% annual discount rate [ 17].
Utility values were discounted using a yearly discount rate of 3.5%% [ 36].
The costs were discounted using a 3% discount rate consistently with cost-effectiveness guidelines (22, 23).
The future costs and benefits were discounted using a 3% annual discount rate.
All future costs and health outcomes were discounted using a 3%% annual discount rate.
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