Discount Rate

Discount rate refers to the change in the present value of future payments the interest rate used, or refer to the note holder in due to banks not required to honor the bank will be deducted the interest rate used. This also refers to the discount rate and rediscount rate, which the member banks will be discounted off the bill and secured to the central bank borrowing as interest paid. Discount rate is the discount rate (Discount Rate). First talk about the discount, holders of notes prior to maturity must be posted to pay interest on the way to the bank transfer notes redeemed in cash. A form of bank loans. Is the holder to sell discounted notes, advances in commercial credit in advance to recover the monetary funds; of discount companies or banks are providing bank credit to the holder of bank notes based on market interest rates and the credibility of the provisions of a discount rate to calculate the discount to the maturity date of the discount interest discounted bills denominated interest rate = discount rate × × maturity period. Pay interest holder in the paste, you can get from the bank equal to the face value minus the balance of the discounted cash interest, the ownership will belong to the bank notes. Maturity, the bank drawer tickets to be redeemed in cash, such as being refused to pay the fare can be obtained from the endorser. discount notes at different levels of discount and rediscount can be divided into two kinds of commercial banks to businesses, said the bill discounting business discount, the central bank to commercial banks have not discounted businesses again due bills discounted, said rediscount or re-discount. discount rate is affected by changes in market supply and demand of funds created spontaneously, the discount rate is prescribed by the central bank.