# What is discount rate in discounted cash flow?

**discount rate**is the

**rate**of return used in a

**discounted cash flow**analysis to determine the present value of future

**cash flows**. In a

**discounted cash flow**analysis, the sum of all future

**cash flows**(C) over some holding period (N), is

**discounted**back to the present using a

**rate**of return (r).

Correspondingly, how do you find the discount rate?

**Procedure:**

- The rate is usually given as a percent.
- To find the discount, multiply the rate by the original price.
- To find the sale price, subtract the discount from original price.

Also Know, what does discount rate mean how do we use a discount rate? First, the **discount rate** refers **to** the interest **rate** charged **to** the commercial banks and other financial institutions for the loans they take from the Federal Reserve Bank through the **discount** window loan process, and second, the **discount rate** refers **to** the interest **rate used** in **discounted** cash flow (DCF) analysis **to**

Also Know, what is a typical discount rate?

**Discount rates** are usually range bound. You won't use a 3% or 30% **discount rate**. Usually within 6-12%. For investors, the cost of capital is a **discount rate** to value a business.

What is the formula to calculate percentage?

**1.** **How to calculate percentage of a number.** **Use the percentage formula: P% * X = Y**

- Convert the problem to an equation using the percentage formula: P% * X = Y.
- P is 10%, X is 150, so the equation is 10% * 150 = Y.
- Convert 10% to a decimal by removing the percent sign and dividing by 100: 10/100 = 0.10.