discount rate

noun

1
: the interest on an annual basis deducted in advance on a loan
2
: the charge levied by a central bank for advances and rediscounts

Examples of discount rate in a Sentence

Recent Examples on the Web
Examples are automatically compiled from online sources to show current usage. Read More Opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback.
The discount rate, which is the baseline used to determine the present value of future cash flows, is closely linked to the Fed funds rate. Ronen Cojocaru, Forbes, 23 Oct. 2024 Lower rates are typically beneficial for growth sectors including technology, which have higher earning potential in outer years, as lower discount rates boost the present value of future earnings. Trefis Team, Forbes, 14 Oct. 2024 Stock prices are an attempt to estimate the present value of future profits — and the lower interest rates go in the future, the lower the discount rate used to value them, and the more those profits are worth today. Felix Salmon, Axios, 19 Sep. 2024 Equity duration is a measure of how sensitive a stock’s cash flows are to changes in the discount rate. Yun Li, CNBC, 16 Sep. 2024 See all Example Sentences for discount rate 

Word History

First Known Use

1827, in the meaning defined at sense 1

Time Traveler
The first known use of discount rate was in 1827

Dictionary Entries Near discount rate

Cite this Entry

“Discount rate.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/discount%20rate. Accessed 26 Nov. 2024.

Legal Definition

discount rate

noun
1
: the interest on an annual basis deducted in advance on a loan
2
: the interest levied by the Federal Reserve for advances and rediscounts

More from Merriam-Webster on discount rate

Last Updated: - Updated example sentences
Love words? Need even more definitions?

Subscribe to America's largest dictionary and get thousands more definitions and advanced search—ad free!