Discounting - the formula Economic evaluation weights future costs and benefits using a discount rate (r) according to the year in which they accrue, then adds them up and expresses them in present value (PV) terms n FV(t) PV = (1+r) PV present value FV future value r discount rate t=0 1 time period (year) Year Programme A Cost $.000 Programme B Cost $.000 Discounting - an example 5 20 ON 10 0 0 15