Discount Rate Economic Definition

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Discount Rate Definition - Investopedia

(4 days ago) Discount Rate: The discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.

https://www.investopedia.com/terms/d/discountrate.asp

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What Is the Discount Rate? - ThoughtCo

(2 days ago) In economics and finance, the term "discount rate" could mean one of two things, depending on context. On the one hand, it is the interest rate at which an agent discounts future events in preferences in a multi-period model, which can be contrasted with the phrase discount factor.On the other, it means the rate at which United States banks can borrow from the Federal Reserve.

https://www.thoughtco.com/discount-rate-definition-1146078

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Discount Rate - Definition, Types and Examples, Issues

(3 days ago) In corporate finance, a discount rate is the rate of return used to discount future cash flows back to their present value. This rate is often a company’s Weighted Average Cost of Capital (WACC), required rate of return, or the hurdle rate that investors expect to earn relative to the risk of the investment.

https://corporatefinanceinstitute.com/resources/knowledge/finance/discount-rate/

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Definition of discount rate, definition at Economic Glossary

(4 days ago) Economic Definition of discount rate. Defined. Offline Version: PDF. Term discount rate Definition: The interest rate that the Federal Reserve System charges for loans to banks. To ensure that our nation's banks retain their liquidity and remain in business, the Federal Reserve System stands ready to lend bank reserves on a moment's notice to ...

https://glossary.econguru.com/economic-term/discount+rate

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Federal Discount Rate: Definition, Impact, How It Works

(3 days ago) The Federal Reserve discount rate is the rate that the U.S. central bank charges member banks to borrow from its discount window to maintain the bank's cash reserve requirements. On March 16, 2020, the Federal Reserve Board of Governors lowered the rate to 0.25% in response to the COVID-19 coronavirus outbreak.

https://www.thebalance.com/federal-reserve-discount-rate-3305922

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What is the Discount Rate and Why Does It Matter? - SmartAsset

(2 days ago) The discounted rate of return – also called the discount rate and unrelated to the above definition – is the expected rate of return for an investment. Also known as the cost of capital or required rate of return, it estimates current value of an investment or business based on its expected future cash flow.

https://smartasset.com/investing/discount-rate

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Federal Discount Rate Definition

(2 days ago) The federal discount rate is used as a tool to either stimulate (expansionary monetary policy) or rein in (contractionary monetary policy) the economy. A decrease in the discount rate makes it ...

https://www.investopedia.com/terms/f/federal_discount_rate.asp

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What Is the Discount Rate? | The Motley Fool

(2 days ago) The discount window actually offers three different loan programs, each with its own discount rate. The primary credit program is the Fed's main lending program for eligible banks in "generally ...

https://www.fool.com/knowledge-center/discount-rate.aspx

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What is a Discount Rate and Why Does It Matter? - NPPC

(2 days ago) A discount rate is a term in economics related to the present value of future payments, in this case, pension benefits. The present value of a pension benefit is how much it is worth today. If the worker contributes $100 and the employer contributes $100, then the present value of the pension benefit, as of today, is $200. ...

https://protectpensions.org/2016/04/19/discount-rate-matter/

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Environmental Economics - Discounting and Time Preference

(3 days ago) The discount rate is the rate at which society as a whole is willing to trade off present for future benefits. When weighing the decision to undertake a project with long-term benefits (e.g., wetland protection programs) versus one with short-term benefits and long-term costs (e.g., logging forests near aquatic ecosystems), the discount rate ...

http://www.sfu.ca/~heaps/483/discounting.htm

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Discounting Health Outcomes in Economic Evaluation: The ...

(17 days ago) US guidelines for economic analysis recommend that the impact of the discount rate should be subjected to sensitivity analysis in order to determine the robustness of the study findings . Although this recommendation covers the researchers, it may leave decision makers in a quandary if an analysis is very sensitive to changes in the discount rate.

https://onlinelibrary.wiley.com/doi/full/10.1111/j.1524-4733.2004.74002.x

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Discount Rate - YHEC - York Health Economics Consortium

(2 days ago) The discount factor increases over time, based on an underlying discount rate. NICE guidelines recommend that costs and health outcomes should be discounted at 3.5% per year. So, 1 QALY (or £100) experienced/spent in Year 2 would have a present value of 0.966 QALYs (£96.62).

https://yhec.co.uk/glossary/discount-rate/

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What is a Discount Rate? - Definition | Meaning | Example

(2 days ago) Definition: Discount rate; also called the hurdle rate, cost of capital, or required rate of return; is the expected rate of return for an investment.In other words, this is the interest percentage that a company or investor anticipates receiving over the life of an investment. What Does Discount Rate Mean?

https://www.myaccountingcourse.com/accounting-dictionary/discount-rate

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Chapter 6 Discounting Future Benefits and Costs D

(5 days ago) costs) and the discount rate should be adjusted for inflation; therefore most of the discussion in this chapter focuses on real discount rates and values. The NPV can be estimated using real or nominal . benefits, costs, and discount rates. The analyst can estimate the present value of costs and benefits

https://www.epa.gov/sites/production/files/2017-09/documents/ee-0568-06.pdf

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Discount Rates - Engineering ToolBox

(2 days ago) A discount is a deduction in percentage from the original price offered by the supplier. the base is the original price of the item - or the "list price" the price after discount is the "net price" Single Discount. A single discount can be estimated as. N = L (1 - i /100) (1) where . N = net price. L = list price. i = discount rate (%)

https://www.engineeringtoolbox.com/discount-rate-d_1698.html

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What are social discount rates? - Grantham Research ...

(2 days ago) There are different theoretical arguments for using declining rates, and therefore recommendations on how fast the discount rate should decline also differ. However, perhaps the most popular argument derives from the fact that future economic growth is uncertain (for example, see Weitzman, 2001 and Gollier, 2002 ).

https://www.lse.ac.uk/granthaminstitute/explainers/what-are-social-discount-rates/

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What is a discount rate in cost benefit analysis ...

(2 days ago) Discount rates can vary from 0 to infinity. A discount rate of 0% means that someone is indifferent between having a benefit or cost now vs. any time in the future. A discount rate of 0% implies that future generations are treated exactly the same as current generations.

https://www.freeeconhelp.com/2018/06/what-is-discount-rate-in-cost-benefit.html

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Discount Rate Definition | Discount Rate Formula ...

(2 days ago) Discount Rate Explanation. Using discount rate, explained as the risk factor for a given investment, has many benefits.The purpose is to account for the loss of economic efficiency of an investor due to risk. Investors use this rate because it provides a way to account and compensate for their risk when choosing an investment.Furthermore, this provides, with each choice, a buffer to provide ...

https://strategiccfo.com/discount-rate/

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Discounting the future - Ejolt

(2 days ago) The discount rate is a rate used to convert future economic value into present economic value. This is realised through the mechanism known as discounting. For instance, if somebody offers to pay to you EUR 105 an year from now, the present value is EUR 100 if you would earn interest of EUR 5 on a deposit of EUR 100.

http://www.ejolt.org/2013/01/discounting-the-future/

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Discount rate | finance | Britannica

(3 days ago) The discount rate serves as an important indicator of the condition of credit in an economy. Because raising or lowering the discount rate alters the banks’ borrowing costs and hence the rates that they charge on loans, adjustment of the discount rate is considered a tool to combat recession or inflation.

https://www.britannica.com/topic/discount-rate

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Discount rate Flashcards | Quizlet

(2 months ago) interest rate charged to commercial banks and other depository institutions for loans received from the federal reserve bank's discount window Click card to see definition 👆 Tap card to see definition 👆

https://quizlet.com/100086954/discount-rate-flash-cards/

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On discount rates for economic evaluations in global ...

(7 days ago) Key Messages. Most economic evaluations in global health apply a discount rate of 3%, in line with guidelines developed for the USA. This discount rate is out of line with the economic context of low- and middle-income countries (LMICs), where a discount rate of 5–6% would generally be more appropriate.

https://academic.oup.com/heapol/article/35/1/107/5591528

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Time preference - Wikipedia

(3 days ago) In economics, time preference (or time discounting, delay discounting, temporal discounting, long-term orientation) is the current relative valuation placed on receiving a good at an earlier date compared with receiving it at a later date. There is no absolute distinction that separates "high" and "low" time preference, only comparisons with others either individually or in aggregate.

https://en.wikipedia.org/wiki/Time_preference

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Chapter 15 economics Flashcards | Quizlet

(2 months ago) the Fed restricts the growth of the money supply, which drives interest rates up which normally slows economic growth. ... Discount Rate. the interest rate on the loans that the Fed makes to banks. Prime Rate. rate of interest banks charge on short-term loans to their best customers. Federal Funds Rate. Interest rate banks charge each other for ...

https://quizlet.com/79372331/chapter-15-economics-flash-cards/

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Hyperbolic discounting - Wikipedia

(5 days ago) In economics, hyperbolic discounting is a time-inconsistent model of delay discounting.It is one of the cornerstones of behavioral economics and its brain-basis is actively being studied by neuroeconomics researchers.. The discounted utility approach states that intertemporal choices are no different from other choices, except that some consequences are delayed and hence must be anticipated ...

https://en.wikipedia.org/wiki/Hyperbolic_discounting

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Discount rate | Definition of Discount rate at Dictionary.com

(3 days ago) Discount rate definition, the rate of interest charged in discounting commercial paper. See more.

https://www.dictionary.com/browse/discount-rate

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What Is a Discount Factor? - ThoughtCo

(3 days ago) A present-oriented agents discounts the future heavily and so has a LOW discount factor. Contrast discount rate and future-oriented. In a discrete time model where agents discount the future by a factor of b, one usually lets b=1/(1+r) where r is the discount rate.

https://www.thoughtco.com/discount-factor-definition-1146077

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Reserve Requirement, Open Market Operations and the ...

(3 days ago) On the other hand, when the Fed wishes to cool the economy down, it can decrease the money supply by selling U.S. government bonds, increasing the reserve requirement or raising the discount rate.

https://study.com/academy/lesson/reserve-requirement-open-market-operations-and-the-discount-rate.html

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Federal Reserve Board - The Discount Window and Discount Rate

(3 days ago) The discount rate on secondary credit is higher than the rate on primary credit. The rate for seasonal credit is an average of selected market rates. Rates are established by each Reserve Bank's board of directors, subject to the review and determination of the Board of Governors of the Federal Reserve System.

https://www.federalreserve.gov/monetarypolicy/discountrate.htm

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Real Discount Rate - Homer Energy

(3 days ago) For example, if the nominal discount rate is 8% and the expected inflation rate is 3.5%, the annual real discount rate is 4.35%. If you want to enter the real annual interest rate directly (for example, to perform a sensitivity analysis), you can set the expected inflation rate to zero and enter values for the real discount rate into the nominal discount rate input.

https://www.homerenergy.com/products/pro/docs/latest/real_discount_rate.html

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Discount Rate Formula | How to calculate Discount Rate ...

(3 days ago) Discount Rate = 2 * [($10,000 / $7,600) 1/2*4 – 1] Discount Rate = 6.98%; Therefore, the effective discount rate for David in this case is 6.98%. Discount Rate Formula – Example #3. Let us now take an example with multiple future cash flow to illustrate the concept of a discount rate.

https://www.educba.com/discount-rate-formula/

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What is Coupon Rate? Definition of Coupon Rate, Coupon ...

(3 days ago) Definition: Coupon rate is the rate of interest paid by bond issuers on the bond’s face value.It is the periodic rate of interest paid by bond issuers to its purchasers. The coupon rate is calculated on the bond’s face value (or par value), not on the issue price or market value.

https://economictimes.indiatimes.com/definition/coupon-rate

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Discount Rate | Definition of Discount Rate by Merriam-Webster

(11 days ago) Discount rate definition is - the interest on an annual basis deducted in advance on a loan.

https://www.merriam-webster.com/dictionary/discount%20rate

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Federal funds rate Definition | Bankrate.com

(2 days ago) The Fed can raise or lower the discount rate to influence the federal funds effective rate rate. For example, if the economy needs to be stimulated, it may lower the discount rate.

https://www.bankrate.com/glossary/f/federal-funds-rate/

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What is the Policy Interest Rate? - Definition, Data and ...

(2 days ago) The most common are the overnight lending rate, discount rate and repurchase rate (of different maturities). Normally, central banks use the policy interest rate to perform contractive or expansive monetary policy. A rise in interest rates is commonly used to curb inflation, currency depreciation, excessive credit growth or capital outflows.

https://www.focus-economics.com/economic-indicator/policy-interest-rate

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Why Do Lease Discount Rates Matter? | Deloitte US

(2 days ago) Choosing an appropriate lease discount rate. If a lessee did not incur borrowings at or near a lease’s commencement date for a term similar to the lease term—or for amounts similar to the lease payments—the lessee may need to determine its IBR by referencing the costs of borrowing for competing entities within the same industry with credit ratings similar to that of the lessee (for a ...

https://www2.deloitte.com/us/en/pages/audit/articles/why-lease-discount-rates-matter.html

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Health Economics Information Resources: A Self-Study ...

(2 days ago) Rate of inflation is 5% per annum Discount rate is 5% * From Donaldson C, Shackley P. Economic studies. In: Oxford Textbook of Public Health. 3rd ed. Detels R et al. (eds.). Oxford. Oxford University Press. 1997. Here is what this table means. Costs occurring now; i.e., in Year 0 are not discounted.

https://www.nlm.nih.gov/nichsr/edu/healthecon/04_he_07.html

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What is Discount Rate? - Definition, History & Formula ...

(7 days ago) By changing the discount rate, the Board of Governors can change the amount of money available for loans, which affects the country's economy and inflation rate. When discount rates are low, Rita ...

https://study.com/academy/lesson/what-is-discount-rate-definition-history-formula.html

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Discount rate financial definition of discount rate

(4 days ago) The interest rate at which the Federal Reserve makes short-term loans to member banks.The discount rate is an indicator of the direction in which the Federal Reserve is trying to push the broader economy.In general, a low interest rate indicates that it is trying to promote growth by making liquidity easily available, and a high interest rate shows that the Fed is concerned about inflationary ...

https://financial-dictionary.thefreedictionary.com/discount+rate

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Ramsey and Intergenerational Welfare Economics (Stanford ...

(3 days ago) Some economists call \(\varrho(t)\) the consumption rate of interest (Little and Mirrlees, 1974), others call it the social rate of discount (Arrow and Kurz, 1970). \(\varrho(t)\) is a fundamental object in social cost-benefit analysis. Let \(\Delta\) be vanishingly small. Then, by definition

https://plato.stanford.edu/entries/ramsey-economics/

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Definition of discount, definition at Economic Glossary

(4 months ago) Term discount Definition: In financial terms, a bond or similar financial asset that sells below its face value.Discounting is done to equalized the interest rate attached to a bond with comparable interest rates in the economy. For example, a $100,000 bond that pays a fixed 10 percent interest on the face value (that is, $10,000 annually) would be discounted to $83,333 if comparable interest ...

https://glossary.econguru.com/economic-term/discount

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Federal Funds Rate Definition & Example | InvestingAnswers

(2 days ago) The federal funds rate is often confused with the discount rate, which is the interest rate the Federal Reserve charges on loans directly from the Federal Reserve Bank. But they are not the same. ... changes in the overnight rate can have widespread economic effects.

https://investinganswers.com/dictionary/f/federal-funds-rate

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Discount Rate - an overview | ScienceDirect Topics

(1 months ago) E.R. Yescombe, Edward Farquharson, in Public-Private Partnerships for Infrastructure (Second Edition), 2018 §7.4.3 Public-Sector Discount Rate. The discount rate to be used is a key issue, not only in the economic-viability calculation where a DCF approach is being used, but also in any comparison between the PPP and public-sector procurement options.

https://www.sciencedirect.com/topics/economics-econometrics-and-finance/discount-rate

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Discount Rates for Environmental Benefits Occurring in the ...

(3 days ago) Policy decisions require a social discount rate rather than a simple market discount (or interest rate).The social discount rate provides an estimate of the rate at which society not just the market trades off the future and the present. Lind et al(1982), among others, suggest that the discount rate consists of two

http://www.iearesearch.com/papers/discounting.pdf

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Discount Factor for Economic Analyses | Bizfluent

(2 days ago) In economic analysis, the discount factor is the measure of how people value time. Simply put, it is an estimate of how much less something is worth if it is received in the future. A positive discount factor indicates that, the further time progresses, the less desirable an asset. Discount factors have a range of ...

https://bizfluent.com/info-12044384-discount-factor-economic-analyses.html

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Discount Rate | Definition of Discount Rate by Oxford ...

(2 months ago) ‘In this economic environment the average discount rate on Treasury bills is 4.95 per cent.’ More example sentences ‘Discounting means selling the bill for cash at a discount, which depends on the discount rate and the number of days the bill has to run to maturity.’

https://www.lexico.com/en/definition/discount_rate

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Money stock: A Glossary of Political Economy Terms - Dr ...

(4 days ago) Money stock (Also sometimes loosely referred to as the money supply, a term that, strictly speaking, should be reserved for the entire supply schedule of associated interest rates and the quantities of money that would be created at those rates.)The money stock is the total amount of money available in a particular economy at a particular point in time.

http://webhome.auburn.edu/~johnspm/gloss/money_stock.phtml

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THE CHOICE OF DISCOUNT RATE FOR CLIMATE CHANGE POLICY ...

(5 days ago) where W 0 is social welfare evaluated at time 0, is the social rate of time preference, C t is consumption in year t and U t is utility at time t. Suppose that the utility function does not change through time (U t(C t) U(C t),8t) and that the utility function has the constant elasticity form: U(C t) ¼ C 1 t =(1 )(2) The parameter is the (constant) elasticity of marginal utility of consumption.9

http://web.stanford.edu/~goulder/Papers/Published%20Papers/Choice%20of%20Discount%20Rate%20for%20Cl%20Ch%20Policy%20Evals%20(Goulder-Williams,%20CCE%202012).pdf

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