Discount Rate

The discount rate can mean

  • an interest rate a central bank charges depository institutions that borrow reserves from it, for example for the use of the Federal Reserve's discount window.
  • the same as interest rate; the term "discount" does not refer to the common meaning of the word, but to the meaning in computations of present value, e.g. net present value or discounted cash flow
  • the annual effective discount rate, which is the annual interest divided by the capital including that interest; this rate is lower than the interest rate; it corresponds to using the value after a year as the nominal value, and seeing the initial value as the nominal value minus a discount; it is used for Treasury Bills and similar financial instruments

Read more about Discount Rate:  Annual Effective Discount Rate, Business Calculations

Other articles related to "discount rate, rate, discount rates, rates, discount":

Discounting - Discount Rate
... The discount rate which is used in financial calculations is usually chosen to be equal to the Cost of Capital ... equilibrium, will be the same as the Market Rate of Return on the financial asset mixture the firm uses to finance capital investment ... Some adjustment may be made to the discount rate to take account of risks associated with uncertain cash flows, with other developments ...
Discount Rate - Business Calculations
... Businesses need to consider the discount rate when deciding whether to spend some of their profits on buying a new piece of equipment, or whether to give the ... giving them the profit now is based on the shareholder's discount rate ... There is a widely used way of estimating shareholder's discount rates using share price data ...
Federal Reserve 800 Billion Dollar Consumer Loan And Bond Plan - Federal Reserve Lowers Interest Rates
... Federal reserve rates changes (Just data after January 1, 2008 ) Date Discount rate Discount rate Discount rate Fed funds Fed funds rate Primary Secondary rate ... – See more detailed US federal discount rate chart ...
Analytica - Intelligent Multidimensional Arrays
... divisions may reflect the fact that the effective discount rate is not the same for international divisions of a company, and that different rates are applicable to different hypothetical scenarios ... In essence, Analytica repeats the same calculation using the discount rate for each possible combination of Country and Economic_scenario ...
Antal E. Fekete - Research - Real Bills Doctrine
... The discount practice is therefore a bridge for time (maximum 91 days or 1 season), not for funds ... The discount rate cannot be regarded as an "interest rate", a position Charles Rist and John Fullarton have also taken ... The nature and origin of the discount rate are entirely different from that of the rate of interest ...

Famous quotes containing the words rate and/or discount:

    At the rate science proceeds, rockets and missiles will one day seem like buffalo—slow, endangered grazers in the black pasture of outer space.
    Bernard Cooper (b. 1936)

    Don’t discount our powers;
    We have made a pass
    At the infinite,
    Robert Frost (1874–1963)