The treatment of time in valuing costs and benefits, that is, the adjustment of costs and benefits to their present values, requiring a choice of discount rate and time.

The process of finding the present value of a future single payment or stream of payments. The interest rate used in the process is called the discount rate.

To sell at a reduced value; the difference between face value and cash value. Some companies specialize in buying mortgages and real estate contracts (often referred to as paper) at a discount. Of ten the original lender, wanting to cash out on the loan, will thus sell the mortgage at the current published mortgage discount rate. If the discount rate is 12 percent, for example, the lender could sell a $100,000 mortgage at 88 percent of its worth ($88,000 or 12 percent below par).

Calculation of the present value of a future sum by application of the relevant rate of interest. It is the converse of compounding and is given by: Co = Cn (1+i) –n where is the interest rate per period (usually per year), Cn is the sum to be received n periods in the future and C(o) is the present value. Note that this formulation assumes is the same in each period. See also discount factor.

Process applied to costs, benefits, and outcomes based on the concept that money and health have greater value in the present than at some future time due to uncertainty about the future.

The process of finding present value; the inverse of compounding to find future value.

The process of computing how much you need to set aside today to reach a future amount, based on interest-rate assumptions.

The process of finding the present value of a series of future cash flows. Discounting is the reverse of compounding.

a process whereby forecast cash flows are discounted at a discount rate to calculate present value.

Determining the present value of a sum of money to be received in the future.

The mathematical process of calculating present value from a stream of future income. The practice of issuing securities at less than their face value, with the holder profiting from the difference in the price of the discounted security and its face value instead of receiving payment in the form of interest. Including in the price of a security the future effects of an anticipated event.

the process used in cost analyses to reduce mathematically future costs and/or benefits/outcomes to their present value, e.g., at an annual rate of five or ten percent. These adjustments reflect that given levels of costs and benefits occurring in the future usually have less value in the present than the same levels of costs and benefits realized in the present.

An accepted usance bill of exchange is sold at an amount less than its face value.

Expressing anticipated future cash flows as present-value equivalents.

This is a technique that allows the calculation of present values of inputs and benefits that accrue in the future.

The term used to describe the act of purchasing an accepted usance bill of exchange for an amount less than its face value.

Transaction in which a bank or other financial agent acquires a bill of exchange or other draft from its drawer and charges interest for advancing the amount of the exchange or draft.

The process of reducing the value of money received in the future to reflect the opportunity cost of waiting to receive the money

The sale at less than original price value of a commodity or monetary instrument, often for immediate payment.

1. Application of a discount or rate of interest to a capital amount or title to such an amount. Calculations of the price or present value of a bill before maturity, by discounting at the current appropriate rate of interest. 2. The pledging of amounts owed by debtors (accounts receivable) as collateral against a loan. 3. An adjustment of present prices in line with expected future changes in commodity prices, security prices, or exchange rates due to the anticipated change in profits or some other events.

Act of purchasing an accepted usance bill of exchange at an amount less than the face value.

The process of finding the present value of a lump sum of stream of payments. Also see Compounding.

The conversion of a future amount of money to its present value.

Discounting, the antithesis of compounding, is the calculating of the present value of a future amount.

The process of calculating the present value of a stream of future cash flows.

The process by which the streams of future costs and/or benefits (beyond 12 months) are converted to equivalent present values.

Means of raising money against the value of unpaid invoices.

A procedure used to convert periodic incomes, cash flows, and reversions into present value; based on the assumption that benefits received in the future are worth less than the same benefits received now.

The process that reduces future costs and benefits to reflect the time value of money and the common preference of consumption now rather than later.

The process of calculating the present value of some future amount

The calculation of the present value of a stream of prospective cash flows.

The process of calculating the present value of a series of cash flows by dividing each cash flow by one plus an appropriate discount rate.

Discounting is selling a note for less than the face amount of the note.

A method of financial and economic analysis used to determine present and future values of investments or expenses.