Final answer:
The discount factor and discount rate are related by the formula: Discount factor = 1 / (1 + Discount rate). To find the discount rate, substitute the given discount factor into the formula and solve for the discount rate.
Step-by-step explanation:
The discount factor and the discount rate are related to each other by the formula:
Discount factor = 1 / (1 + Discount rate)
To find the discount rate when the discount factor is 0.9009, substitute it into the formula and solve for the discount rate:
0.9009 = 1 / (1 + Discount rate)
Solving for the discount rate:
1 + Discount rate = 1 / 0.9009
Discount rate = 1 / 0.9009 - 1