Learn about the differences between the cost of capital and the discount rate as they relate to estimating a required return for business activity.

But when a bank needs to borrow money, where does it go? Thanks to the discount rate, they can go to the Federal Reserve for help. The discount rate, which is one of several tools the Fed uses to ...

The federal funds rate is a rate set by the government that banks charge each other for short-term loans. Learn how the ...

However, the process is complicated, typically involving two distinct rates: a consumption discount rate for future consumption, reflecting individual time preferences, and a higher investment ...

Figure 1. Overview of discounting and time preference topics covered on this Web page. When weighing the benefits and costs of coastal restoration projects and other environmental management programs, ...

Discount window rates are published daily on the Federal Reserve’s website. An Example of the Discount Window in Action Historically, borrowing from the discount window was like an S.O.S. signal ...

Why do some bonds sell at a premium, some at par, and some at a discount? The fundamental reason for bond pricing fluctuations is the demand and supply, and the resulting interest rates of the same.

The future value of an asset can be calculated with its present value and the interest rate model. Where all terms have the meaning as explained above. The dividend discount model is based on this ...