Bilateral Factor Calculator

Formula

The formula to calculate the bilateral factor (BF) is:

\[ BF = (1 + r)^n + (1 + r)^{-n} \]

Where:

Bilateral Factor: A measure used in financial calculations that involves adding 1 to the interest rate and raising it to the power of the number of periods, then adding 1 to the interest rate and raising it to the power of the negative number of periods. The sum of these two results gives the bilateral factor.

Let's say the interest rate (r) is 0.05 and the number of periods (n) is 10. Using the formula:

\[ BF = (1 + 0.05)^{10} + (1 + 0.05)^{-10} \]

We get:

\[ BF \approx 1.6289 + 0.6139 \approx 2.2428 \]

So, the bilateral factor is approximately 2.2428.