Enter the interest rate and number of periods into the calculator to determine the bilateral factor. This calculator can also evaluate any of the variables given the others are known.
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Bilateral Factor Formula
The following formula is used to calculate the bilateral factor.
BF = (1 + r)^n + (1 + r)^-n
Variables:
- BF is the bilateral factor
- r is the interest rate (decimal)
- n is the number of periods
To calculate the bilateral factor, add 1 to the interest rate and raise it to the power of the number of periods. Then, add 1 to the interest rate and raise it to the power of the negative number of periods. The sum of these two results is the bilateral factor.
How to Calculate Bilateral Factor?
The following steps outline how to calculate the Bilateral Factor.
- First, determine the interest rate (r) as a decimal.
- Next, determine the number of periods (n).
- Next, calculate (1 + r)^n.
- Next, calculate (1 + r)^-n.
- Finally, calculate the Bilateral Factor (BF) using the formula BF = (1 + r)^n + (1 + r)^-n.
- After inserting the variables and calculating the result, check your answer with a calculator.
Example Problem:
Use the following variables as an example problem to test your knowledge.
Interest rate (r) = 0.05
Number of periods (n) = 3
