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Discount Rate

Definition: Percentage of discount charged by a bank for purchasing loans or commercial paper in advance of the date of maturity. Definition: [crh] The interest rate that the Federal Reserve charges a bank to borrow funds when a bank is temporarilDefinition: y short of funds. Collateral is necessary to borrow, and such borrowing is quite limited because the Fed views it as a privilege to be used to meet short-term liquidity needs, and not a device to increase earnings. In context of NPV or PV calculations, the discount rate is the annual percentage applied. In the context of project financing, the discount rate is often the all-in interest rate or the interest rate plus Definition: HREF="/?rd=margin">margin.

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