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Review: date=April 2008

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Blogs for Discount Rate

Valuecruncher " Blog Archive " Discount Rates - A combination of ...

The discount rate is one of the key assumptions in the Valuecruncher valuation. ... Valuecruncher applies the discount rate to the company's forecast nominal post ...blog.valuecruncher.com/2008/06/discount-rates-a-combination-...

Explaining the Discount Window - Real Time Economics - WSJ

... years ago, the discount rate was set below ... See my blog on this at http://singhinderjeet.blogspot.com/2007/08/good-timing-for-discount-rate-cu t-by.html ...blogs.wsj.com/economics/2007/08/17/explaining-the-discount-w...

Discount Rate β€” Blogs, Pictures, and more on WordPress

Blogs about: Discount Rate. Featured Blog. Controversy on Discounting Greenhouse Gas Emissions ... FED reduces target Fed Funds rate to 1.00%; Discount rate to 1.25 ...en.wordpress.com/tag/discount-rate/

The Becker-Posner Blog: Global Warming and Discount Rates--Posner

That focus makes the choice of the discount rate important, and potentially decisive. ... Then at a discount rate of 5 percent, the present-value equivalent of ...www.becker-posner-blog.com/archives/2007/02/global_warming_1...

What Discount Rate Should I Use? | Joe Ponzio's F Wall Street

... for risk by using a high discount rate. What does Buffett mean? ... Page "" the Blog "" How to Think About Investing "" What Discount Rate Should I Use? ...www.fwallstreet.com/blog/46.htm

Wikipedia About Discount Rate

Review: date=April 2008

For the interest rate charged to banks for borrowing short-term funds directly from the Federal Reserve, see discount window.

The discount rate is the interest rate the Federal Reserve System charges depository institutions that borrow reserves from it.

The term discount rate has two meanings:

  • the same as interest rate; the term "discount" does not refer to the meaning of the word, but to the purpose of using the quantity, such as computations of present value, e.g. net present value / 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

Annual effective discount rate

The annual effective discount rate is the annual interest divided by the capital including that interest, which is the interest rate divided by 100% plus the interest rate. It is the annual discount factor to be applied to the future cash flow, to find the discount, subtracted from a future value to find the value one year earlier.

For example, suppose there is a government bond that sells for $95 and pays $100 in a year's time. The discount rate according the given definition is

\frac{100-95}{100} = 5.00\%

The interest rate is calculated using 95 as its base:

\frac{100-95}{95} = 5.26\%

For every annual effective interest rate, there is a corresponding annual effective discount rate, given by the following formula:

d = \frac{i}{1+i}\approx i-i^2

or inversely,

i = \frac{d}{1-d}\approx d+d^2

where the approximations apply for small i and d; in fact i - d = id.

See also notation of interest rates.

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 profit back to their shareholders. In an ideal world, they would only buy a piece of equipment if the shareholders would get a bigger profit later. The amount of extra profit that a shareholder requires in the future in order to prefer that the company buys the equipment rather than 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. It is known as the capital asset pricing model. Businesses normally apply this discount rate to their decisions about purchasing equipment by calculating the net present value of the decision.

Search results for Discount Rate

Discount - Wikipedia, the free encyclopedia

Reason for high discount rates for startups: ... One method that looks into a correct discount rate is the capital asset pricing model. This model takes in ...en.wikipedia.org/wiki/Discount

The Federal Reserve Bank Discount Window & Payments System Risk Website

... rates, including the Discount or Primary and Secondary lending Rate, Seasonal ... Current Discount Rate Table. Historical Discount Rate Tables. Current ...www.frbdiscountwindow.org/rates.cfm?hdrID=20&dtlID=

Discount rate - encyclopedia article - Citizendium

Discount rates are used in economics to allow for the reduced values that are ... 2 Discount rates in cost/benefit analysis. 2.1 The social opportunity cost rate ...en.citizendium.org/wiki/Discount_rate

Federal Discount Rate

Federal Discount Rate - Definition of Federal Discount Rate on Investopedia ... in the discount rate makes it cheaper ... Who determines interest rates? ...www.investopedia.com/terms/f/federal_discount_rate.asp

Discount Interest Rate Forecast

Discount Rate Historical Data. Fed Fund's Rate Extended Forecast ... Current Money Rates. September 26, 2008 (Close of Day) Indicator. Value. Prime Rate. 5.00 ...www.forecasts.org/disc.htm

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News about Discount Rate

Hyundai Genesis 4.6: Cut-rate luxury

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Treasuries Gain as Report May Show Jobless Rate at 25-Year High

BloombergMay 8 (Bloomberg) -- Treasuries rose before a government report today that economists said will show the U.S. jobless rate climbed to a 25-year high and on speculation surging yields will make it tougher to snap the recession.http://www.bloomberg.com/apps/news?pid=20601009&sid=abi_4sIy...

Discount Retailers Enjoy Strong Month

Washington PostValue-conscious shoppers flocked to discount stores in April, boosting sales at chains such as Wal-Mart and T.J. Maxx, according to data released today.http://www.washingtonpost.com/wp-dyn/content/article/2009/05...

Pakistan Mobile Buys Back Debt - Risks Ratings Downgrade

Cellular-News.comEgypt's Orascom Telecom Holding (OTH) says that its wholly owned Pakistan subsidiary, Pakistan Mobile Communications (PMCL) had brought back US$140 million of its debt at the rate of US$730 per US$1,000.http://www.cellular-news.com/story/37397.php

U.S. Postal Service website offers discounts on some services

Los Angeles TimesYou can save time and money printing and paying for postage online. There's an 8% discount on international Express shipping and a 5% discount for commercial Priority Mail. MAILhttp://www.latimes.com/business/la-fi-consumerbriefs10-2009m...

News about Discount Rate

Treasurys inch sideways after auction, stock rally

SalonThe yield on the three-month Treasury bill slipped to 0.17 percent from 0.18 percent Tuesday. The discount rate was 0.18 percent. Banks are borrowing from each other at record-low costs. The London Interbank Offered Rate, or Libor, on three-month ... http://www.salon.com/wires/ap/business/2009/05/06/D9810RNG0_...

Beer and votes: A heady mix

Globe and MailCampbell, who was campaigning yesterday in the swing riding of Fraser-Nicola, has said a re-elected Liberal government would maintain the current discount rate for independent liquor stores and will not impose any new taxes on beer, wine or spirits. Mrhttp://www.theglobeandmail.com/servlet/story/RTGAM.20090501....

Treasurys mixed after stronger-than-expected data

San Francisco GateThe discount rate was 0.19 percent. The cost of borrowing between banks was flat. The London Interbank Offered Rate, or Libor, on three-month loans in dollars was virtually unchanged at 1.01 percent. Later this week, U.S. regulators are scheduled to ... http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/05/04/...

Denmark rates hit 1.65%

The AgeAlthough an EU member, Denmark isn't part of the euro zone but routinely tracks ECB changes, as part of a policy to keep the national currency, the krone, stable against the euro. Nationalbanken also said on Thursday it lowered its discount rate and ... http://business.theage.com.au/business/world-business/denmar...

Kids ride free on Lake Michigan ferry until July 1

CNBCThe Muskegon Chronicle says the discount will save a family of four β€” two parents and two children β€” $115 in fares for a ... officials say fewer bookings are coming from Michigan because of the state's highest-in-the-nation unemployment rate and ... http://www.cnbc.com/id/30674296

Search results for Discount Rate

discount rate: Definition from Answers.com

discount rate n. The interest deducted in advance in purchasing, selling, or lending a commercial paperhttp://www.answers.com/topic/discount-rate

discount rate definition of discount rate in the Free Online ...

discount rate or bank rate. Interest rate charged by a central bank for loans of reserve funds to commercial banks and other financial intermediaries.http://encyclopedia2.thefreedictionary.com/discount+rate

www.Discount-Rate.com

Choose your own discount rate ,processor for your brick and mortor businesshttp://discount-rate.com

DCF Analysis: Calculating The Discount Rate

By Ben McClure Contact Ben Having projected the company's free cash flow for the next five years, we want to figure out what these cash flows are worth today.http://www.investopedia.com/university/dcf/dcf3.asp

discount rate - definition of discount rate by the Free Online ...

discount rate. n. 1. The interest deducted in advance in purchasing, selling, or lending a commercial paper. 2. The interest rate charged by a central bank on loans to its member ... http://www.thefreedictionary.com/discount rate

Wikipedia results for Discount Rate

Discount rate - Wikipedia, the free encyclopedia

The discount rate is an interest rate a central bank charges depository institutions that borrow reserves from it. The term discount rate has two meanings:http://en.wikipedia.org/wiki/Discount_rate

Discount window - Wikipedia, the free encyclopedia

The interest rate charged on such loans by a central bank is called the discount rate, base rate, repo rate, or primary rate. It is distinct from the federal funds rate or its ... http://en.wikipedia.org/wiki/Discount_window

Discounting - Wikipedia, the free encyclopedia

The discount is usually associated with a discount rate, which is also called the discount yield. [1] [3] [1] [2]. The discount yield is simply the proportional share of the initial ... http://en.wikipedia.org/wiki/Discount

Social discount rate - Wikipedia, the free encyclopedia

Social Discount Rate is a measure used to help guide choices about the value of diverting funds to social projects. It is defined as β€œthe appropriate value of r to use in ... http://en.wikipedia.org/wiki/Social_discount_rate

Discounted cash flow - Wikipedia, the free encyclopedia

In finance, the discounted cash flow (or DCF) approach describes a method of valuing a project, company, or asset using the concepts of the time value of money.http://en.wikipedia.org/wiki/Discounted_cash_flow
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Answers for Discount Rate

spidergurlDiscount rate?spidergurlThe discount rate is the percentage of the original price which is deducted from the original sale price. The actual discount is $40 - $25, = $15. You now have to express this discount as a perc...EEK!What is a generally accepted discount rate among economists?EEK!The discount rate is the expected return *you* require on your investment. This means that you have to compare the future benefits of studying (like the higher wage you will earn in the future minus t...venom9176What is the appropriate discount rate to use to discount future taxes I must pay on a condo I might buy?venom9176How long is your mortgage? If your mortgage is 30 years, then use the 30-year T-bill, if it's less, use a smaller T-bill. If it were me, I'd use the 30-year T bill but throw in a couple of extra pe...elcot32How to find the discount rate with the BA II PLUS financial calculator?elcot32A better way to state you Question is: What is the rate of appreciation (i/Yr) for a painting that is purchased today for $2M (PV) and sold 5yrs from now (n=60) for $5M (FV)... there being no addit...woohead420When the federal Reserrve Banks raise the discount rate, what effect does this have on the economy?woohead420First of all, comare the relationship between nominal rates of interest and nominal rates of discount, and use the Watchel readings to understand what this means...
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