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
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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 
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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
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 14 Nov. 2024.
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