Most of us probably still think of Christmas, but surely there are those who are already gearing up for the closing balance of the year. Today, a bit of information on what is the discount rate.

The discount rate is a reliable indicator or measure. It has no reason to exist in itself, but merely reflects another phenomenon. This phenomenon is to change the time value of money.

So, to put it simply - the discount rate expresses the ratio in which the future value of money equals its effective value of the current value (both now) - that provide the recipient information, from which part of future measures should be abandoned in order to turn them into current measures.

The discount rate is used in a number of accounting issues: when testing assets for impairment or when we value financial instruments. The actuary uses the discount rate for the valuation of provisions for employee benefits.

The discount rate is used in the operations of the discount term securities (eg. Bills), as well as some methods of calculating the efficiency of investment.
If you do not know how in practice to calculate the discount rate, the help comes to you 24iValue - where you can find a discount rate calculator (or the NPV calculator).

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