discount rate

noun

Updated on: 21 Mar 2018

Definition of discount rate

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

Recent Examples of discount rate from the Web

Higher bond yields equate to a higher discount rate, making future earnings worth less today and reducing the valuation.

— james mackintosh, WSJ, "After Nine Years, How Long Can This Bull Live?," 8 Mar. 2018
Equities are priced as the discounted value of future profits; the lower the discount rate, the higher the price.

— The Economist, "ButtonwoodAutomation will drive interest rates higher, a new report concludes," 3 Mar. 2018
And by the 2016-17 school year, the 411 private nonprofit schools that the National Association of College and University Business Officers surveyed were reporting an average discount rate of 49 percent for first-time, full-time students.

— ron lieber, New York Times, "Why It’s So Hard to Calculate What You’ll Pay for College," 19 Jan. 2018
That perception of a placid, predictable, low-risk investment climate accounts in large part for the slender discount rate.

— shawn tully, Fortune, "Why Wall Street Is Ignoring "CAPE" Fear," 17 Jan. 2018
Another issue is the tuition discount rate, which increased from 40.8 percent during the 2009-2010 school year to 57 percent in the 2013-2014 school year.

— abigail jones, Newsweek, "The End of Sweet Briar College and the Problem With Women's Colleges," 29 Apr. 2015
As employers compete for scarce workers, the discount rate would rise and profits would be squeezed.

— The Economist, "ButtonwoodAutomation will drive interest rates higher, a new report concludes," 3 Mar. 2018
The prospect of higher rates and rocky markets raise the discount rate, curbing what investors are willing to pay for cash flows that stretch far into the future.

— shawn tully, Fortune, "These Companies Were Hit Hardest by the Big Selloff," 6 Feb. 2018
The board of directors in Atlanta and those at 11 others regional Fed banks recommend changes in the discount rate, which is the interest rate charged to commercial banks on loans from the Federal Reserve.

— chabeli herrera, miamiherald, "AutoNation head to chairboard at Atlanta’s Federal Reserve Bank | Miami Herald," 10 Jan. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'discount rate.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.