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Topic: Discount rate

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In the News (Fri 24 May 19)

 Glossary: Coupon Pass   (Site not responding. Last check: 2007-10-06)
The discount rate is the other interest rate set by the Fed (the main one is the fed funds rate).
The discount rate is less important than the fed funds rate because open market operations are a more efficient, and thus more common, way than discount window lending for the Fed to influence bank reserves.
The discount rate is set by the individual District Feds, subject to the approval of the Fed governors.
www.thestreet.com /tsc/basics/tscglossary/discountrate.html   (108 words)

 NCEDR Tools - Other Tools - Cost-Benefit Analysis Modules
The discount rate is the rate by which benefits that accrue in some future time period must be adjusted so that they can be compared with values in the present.
In principle, this rate is the rate that equilibrates the demand for savings by investors and the supply of savings from savers who refrain from spending all of their income on current consumption.
is to use a 7 percent rate and to conduct sensitivity analysis using 5 and 9 percent rates.
www.ncedr.org /tools/othertools/costbenefit/module4.htm   (1686 words)

 [No title]
Discount Rates Used by Office of Management and Budget (OMB) According to the OMB Circular No. A-94, dated March 27, 1972, "Discount Rates to be Used in Evaluating Time-Distributed Costs and Benefits", a real rate of 10 percent was recommended by OMB for use from March 27, 1972 until October 29, 1992.
Rates for periods with little inflation and with little change in inflation have a particular appeal since rates during these periods are likely to be less influenced by expectations of inflation or by changes in inflation.
The average discount rate used by the 38 percent of cities that used a discount rate was a nominal rate of 7.89 percent, with a range between 5.00 and 10.00 percent.
faculty.washington.edu /zerbe/docs/DISCOUNTRATEHISTORY.doc   (11880 words)

 What is the relationship between the discount rate and mortgage rates? (06/2002)
The discount rate is the interest rate on secured overnight borrowing by depository institutions, usually for reserve adjustment purposes.
The basic discount rate is adjusted from time to time, in light of changing market conditions, to complement open market operations and to support the general thrust of monetary policy.
Still, as is shown in Chart 4, over time the discount rate and the mortgage rate tend to experience similar trends, although the relationships between the two short-term interest rates shown in Chart 1 and the two long-term interest rates shown in Chart 2 are closer.
www.frbsf.org /education/activities/drecon/2002/0206.html   (846 words)

 FRB: Monetary Policy, the Discount Rate
The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility--the discount window.
Discount rates are established by each Reserve Bank's board of directors, subject to the review and determination of the Board of Governors of the Federal Reserve System.
The discount rates for the three lending programs are the same across all Reserve Banks except on days around a change in the rate.
www.federalreserve.gov /monetarypolicy/discountrate.htm   (683 words)

 FRB: H.15 Release--Selected Interest Rates--November 29, 2006
The daily effective federal funds rate is a weighted average of rates on brokered trades.
The rate reported is that for the Federal Reserve Bank of New York.
Rates are for a Fixed Rate Payer in return for receiving three month LIBOR, and are based on rates collected at 11:00 a.m.
www.federalreserve.gov /releases/H15/Current   (754 words)

 The Federal Reserve - Discount Rate
The marked similarity between the discount rates and the Treasury bill interest rates (a market-determined, short-term interest rate) is an example of short-term interest rates responding to changes in the discount rate.
The mortgage rate, a long-term interest rate, generally moves along with the discount rate, an example of the indirect impact changes in the discount rate have on even long-term interest rates.
Although the discount rate was not of great economic interest earlier than and throughout the second World War, discount rate policy began to become more important as it received increased interest after the Accord between the Treasury and the Federal Reserve in 1953.
userpages.umbc.edu /~joelg2/fed/drate.html   (1039 words)

 Circular No. A-94 -- Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs
A table of discount rates based on the expected interest rates for the first year of the budget forecast is presented in Appendix C of this Circular.
The discount factor is equal to 1/(1 + i)t where i is the interest rate and t is the number of years from the date of initiation for the program or policy until the given future year.
The discount factor for a 7 percent discount rate is shown in column (4).
www.whitehouse.gov /omb/circulars/a094/a094.html   (7211 words)

 Discount Rate Mortgage - Mortgage Glossary
Is a mortgage in which the interest rate is adjusted periodically based on a pre-selected index.
On an adjustable rate mortgage, the time between changes in the interest rate and/or monthly payment, typically one, three or five years depending on the index.
When the prime rate of interest is higher on short term loans than on mortgage loans, the mortgage firm has an economic loss which is offset by charging a warehouse fee.
www.discountrate.org /custom2.aspx   (4636 words)

 FRBSF: Discount Rate
Each rate (also referred to as the "discount rate") was in effect until the next date indicated.
The interest rate charged on loans from the SLF is 150 basis points higher than the Federal Open Market Committee's intended federal funds rate.
The rate change on January 9, 2003, did not reflect a change in the stance of monetary policy.
www.frbsf.org /banking/data/discount/index.html   (210 words)

 Shift4 Credit Cards processing solution - Fees and Rates
The Discount Rate is a percentage of each dollar processed, and possibly an additional flat per transaction fee that the Merchant Services Provider charges the Merchant for processing a transaction.
The Effective Rate is the calculated bundled rate to the Merchant of a transaction after combining the Discount Rate, assessments, downgrades, and other per item transaction fees.
Assuming the Discount rate is 2%, the cost to process this transaction should have been $.30, but instead the Merchant will pay $3, a full 20% of the total $15 ticket they'll eventually be funded for.
www.shift4.com /ccc_discount.cfm   (1981 words)

 Discount Rate Range for Oil and Gas Properties
A primary economic parameter in petroleum property appraisals is the discount rate that is used to convert the future value of an income stream to a present day value.
The results in Table 3 are used to quantify the range of discount rates suitable for appraising the wide variety of petroleum properties in Texas.
A range of discount rates adjusted for individual property risk is appropriate to the mass appraisal of a wide variety of petroleum properties found in Texas.
www.window.state.tx.us /taxinfo/proptax/drs04   (1696 words)

 Discount rate - Wikipedia, the free encyclopedia
Discount rate as used in finance and economics is distinct from the discount rate described below; please refer to discounting and discounts.
The discount rate is different from a more normal interest rate.
In practice, discount rates such as 2%, 3%, 3.6845%, 5% and 10% are widely used in economics.
en.wikipedia.org /wiki/Discount_rate   (561 words)

 E-Rate Central: E-rate News Archive 2004
Since E-rate discount levels are determined by the percentage of students in each school whose family income levels qualify them for free or reduced-price lunches, many applicants will find it well worth their time to track the NSLP application process carefully and to encourage maximum participation by eligible students.
(2) Although discount rates are established on a school-by-school basis, districts with separate primary and secondary schools may find it advantageous to collect NSLP applications centrally and to search (so-called "sibling searches") for families enrolling only their younger children in the lunch programs.
Reminder: The discount rate for libraries is based on the eligibility percentages of the schools in the district in which they are located.
www.e-ratecentral.com /archive/News/News2004/weekly_news_36.asp   (859 words)

 St. Lawrence University: Manley Society
Also known as the Applicable Federal Midterm Rate, the IRS discount rate is used to determine the charitable deduction for charitable gift annuities and charitable remainder trusts.
The annual mid-term rate is the annualized average yield of treasury instruments over the past 30 days that have remaining maturities of 3-9 years.
The rate for the month in which the gift is made, or either of the previous two months, may be used to determine the charitable deduction, whichever provides the largest deduction for the donor.
www.stlawu.edu /manleysociety/discount_rate.html   (261 words)

 Current prime rate, fed funds rate, federal discount rate, COFI
The prime rate, as reported by the Wall Street Journal's bank survey, is among the most widely used benchmark in setting home equity lines of credit and credit card rates.
Changes in the fed funds rate and the discount rate also dictate changes in the Wall Street Journal Prime Rate, which is of interest to borrowers.
The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans.
www.bankrate.com /brm/ratewatch/leading-rates.asp   (289 words)

 A History of Discount Rates and Their Use by Government Agencies
The interest rate r is called the discount rate when it is used to solve for P given the other values.
We have suggested that examining actual real rates in the post-war period, except for the 1980-90 period, will yield biased estimates of real discount rates and that net discount rates during this period may also be biased.
As long as the market discount rate is used with nominal wages and the real discount rate is used with real wages, the use of the nominal and real rates will give the same answer as long as the inflation component is the same.
faculty.washington.edu /zerbe/docs/discount_rates   (10871 words)

 CCH Business Owner's Toolkit | Discount Rate
If you are planning to finance the purchase and you know what the interest rate on the loan would be, you can use the rate charged on the loan as the cost of borrowing for the project.
Therefore, you would use the loan's rate as the "discount rate" in computing the net present value for the project.
For example, if the rate on your loan was 8.5 percent and your marginal combined federal and state income tax rate was 40 percent, your tax-adjusted interest rate on the loan would be 5.1 percent (1- 0.40 = 0.60; 0.085 x 0.60 = 0.051).
www.toolkit.cch.com /text/P06_6540.asp   (471 words)

 Federal Reserve Bank of Minneapolis - Discount Rates   (Site not responding. Last check: 2007-10-06)
The discount rates are the interest rates that depository institutions will be charged for credit.
Notarized affidavits of discount rates are available from the Minneapolis Fed's Secretary's Office.
The discount rates in effect for the periods shown are as follows:
woodrow.mpls.frb.fed.us /research/data/us/disc.cfm   (189 words)

 Howstuffworks "How the Fed Works"
The "discount rate" is the interest rate that a regional Reserve Bank charges banks and financial institutions when they borrow funds on a short-term basis.
The discount rate often plays a larger role in the overall monetary policy than would be expected because it is a visible announcement of change in the Fed's monetary policy.
Typically, higher discount rates indicate that more restrictive monetary policies are in store, while a lower rate might signal a less restrictive move.
money.howstuffworks.com /fed9.htm   (280 words)

 Fed cuts discount rate - Jan. 4, 2001
On Wednesday, the Fed cut the discount rate a quarter-point from 6.0 percent to augment a half-point cut in the key federal funds overnight bank lending rate.
The central bank said its board of governors had voted on the cut in the discount rate, the rate charged on Fed loans to commercial banks, unanimously at the request of all 12 regional Federal Reserve banks.
The discount rate is the rate of interest that the Fed would charge commercial banks to borrow money if they needed it.
money.cnn.com /2001/01/04/economy/fed   (574 words)

 Fed Wants to Take the Discount Out of Discount Rate
Currently, the discount rate is set a half percentage point below fed funds, reflecting its historic role as a source of funds for troubled banks that need access to cheap funds.
That role has been crimped over the years because of the stigma and cost associated with accessing the discount rate, and it is primarily what the Fed hopes to re-establish with the current proposal.
Under the plan, the main discount rate, currently at 1.25%, would increase to 2.75%.
www.thestreet.com /funds/ericgillin/10023106.html   (590 words)

 Federal Reserve Bank of Minneapolis - Banking Information - The Discount Window   (Site not responding. Last check: 2007-10-06)
The Discount window functions as a safety valve in relieving pressures in reserve markets; in circumstances where extensions of credit can help relieve liquidity strains in the banking system, the window also helps to assure the basic stability of financial markets more generally.
The Discount Window function is able to assist customers in establishing borrowing relationships, ensuring that appropriate collateral is in place, and extending credit.
The Discount Window is administered in accordance with the Federal Reserve Act, Regulation A, and Operating Circular 10 - Lending.
www.minneapolisfed.org /banking/discount   (258 words)

 Calculating Your Discount - Schools & Libraries (USAC)
Using the percentage in Column 6 and the Discount Matrix, determine the percentage discount to which the school is entitled.
Using the percentage in Column 6 and the Discount Matrix, determine the percentage discount to which each school is entitled.
Using the percentage calculated in (c), the urban/rural status of the library outlet/branch, and the Discount Matrix, determine the percentage discount to which the library outlet/branch is entitled.
www.sl.universalservice.org /reference/Discount.asp   (1143 words)

 Serving Your Home | Services for Your Home | Medical Equipment Discount Rate   (Site not responding. Last check: 2007-10-06)
A medical equipment device, for purposes of MED Rate, is defined as any medical device requiring utility-supplied energy for its operation that is regularly required to sustain the life of a full-time resident in the home.
The term also includes air conditioning for all residential rate categories or electric heat for customers on an electric space heat rate, for paraplegic, hemiplegic, or quadriplegic and multiple sclerosis patients.
The Medical Equipment Discount Rate option will be effective at the beginning of the billing period in which the request is received and approved.
www.smud.org /residential/services/med_rate.html   (297 words)

 Discount rate: A Glossary of Political Economy Terms - Dr. Paul M. Johnson
The more conservative reserve position diminishes the volume of the loans they would otherwise be making, and so an increase in the discount rate tends to cause a decrease in the money stock and thus higher short-term interest rates.
In contrast, lowering the discount rate is expansionary.
As the cost of borrowing from the Fed to meet a temporary emergency falls, bankers tend to reduce their excess reserves to a minimum, extending more loans and thus increasing the money stock and tending to lower interest rates in the short term.
www.auburn.edu /~johnspm/gloss/discount_rate   (253 words)

 RateEmpire.com-discount rate
This is the interest rate charged by the U.S. Federal Reserve, the nation’s central bank,
The Fed alters rates to increase or decrease the growth of the nation’s economic output.
OR The interest rate charged by a financial institution for buying a note receivable.
www.rateempire.com /indexes/discountrate.html   (102 words)

 discount rate Definition
The rate at which member banks may borrow short term funds directly from a Federal Reserve Bank.
The discount rate is one of the two interest rates set by the Fed, the other being the Federal funds rate.
The Fed actually controls this rate directly, but this fact does not really help in policy implementation, since banks can also find such funds elsewhere.
www.investorwords.com /1478/discount_rate.html   (200 words)

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