Equation 1.8, which allows the conversion of a discount rate to an add-on rate when both are quoted for the same day-count convention, is derived by assuming that the cash flows, PV and FV, are the same for each rate quotation. To derive the equation, first rewrite equations 1.3 and 1.6.
Equate these two expressions.
Subtract 1 from each side.
Simplify the numerator on the right side.
Multiply each side of ...