Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal Reserve Bank through the discount window loan process. Second, the discount rate refers to the interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.
Related Posts
Personal Finance Advice
Learn How to Save and start early. If you don't know the power of compounding returns, learn it, because it will make you excited about…
Quotes on Finance
Finance, Money, Quotes / By Zaviad Team
Finance is a broad field that encompasses the study of both the management of money and capital markets. It can be divided into three distinct…
Consumer Purchase Funnel
Finance, Terminology / By Zaviad Team
The consumer purchase funnel is a useful tool for understanding how consumers move from interest to purchase. It is a process that starts with an…
Transaction Costs
Finance, Terminology / By Zaviad Team
Transaction costs are the hidden costs of doing business. They include things like waiting time, paperwork, and communication. Transaction costs can make it harder for…