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
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Rising yields increase the discount rate used in valuation models, reducing the present value of all future cash flows, which in turn could lead to lower stock valuations generally. Michael Khouw, CNBC, 22 May 2025 The discount rate is typically adjusted based on how quickly the payment is made. Allbusiness, Forbes.com, 21 May 2025 Note during the 1955-1964 period, the discount rate was above the federal funds rate. John S. Tobey, Forbes.com, 11 May 2025 Colleges with shrinking applicant pools or rising tuition discount rates — now averaging 56% at private colleges, according to the National Association of College and University Business Officers — face pressure to admit more full-pay students. Gerald Bradshaw, Chicago Tribune, 1 May 2025 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

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Cite this Entry

“Discount rate.” Merriam-Webster.com Dictionary, Merriam-Webster, https://www.merriam-webster.com/dictionary/discount%20rate. Accessed 29 May. 2025.

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

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