Discount Rate
/ˈdɪskaʊnt reɪt/
Definitions
- (n.) The interest rate used to determine the present value of future cash flows in legal and financial contexts, often applied in valuation and damages calculations.
The court used the discount rate to calculate the present value of the plaintiff's future losses.
- (n.) The rate charged by a central bank or other financial institution for lending money, relevant in regulatory and financial legal frameworks.
The regulatory guidelines referenced the central bank’s discount rate for determining loan terms.
Related terms
See also
Commentary
In legal drafting, specifying the exact discount rate and its source is crucial in financial calculations related to damages and valuations to avoid ambiguity.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.