The relationship between discount rate and interest rate is as follows:
Discount rate = interest rate /( 1+ interest rate × term)
Discount rate refers to the interest rate used to turn future payments into present value, or refers to the interest rate used by banks to deduct interest from bills that have not yet expired.
This discount rate also refers to the rediscount rate, that is, each member bank guarantees discounted bills as the interest paid when borrowing from the central bank.
Extended data:
The calculation formula is: discount rate = general loan interest rate /[ 1+ (discount period × general loan interest rate)]
Suppose the exchange rate is 8.07 and the tax rebate rate is 13%.
If there is no tax refund
1 USD =8.07 yuan
There is a tax refund.
Tax refund income = 8.07 * 0.13/1.17 = 0.897 yuan (8.07 is subject to full value-added tax).
So the cost of buying this product is only 8.07-0.897=7. 173. Converted to USD = 7.173/8.07 = USD 0.889.
That is to say, it is equivalent to buying the previous 1 dollar product for $0.889.
Relationship between discount rate and interest rate
The discount rate is based on the interest rate.
estimate
Capital Asset Pricing Model and Discount Rate Estimation
The capital asset pricing model measures risk with undivided variance and links risk with expected return. The undivided risk of any asset can be described by β value, and the expected return can be calculated accordingly.
E(R)=Rf+β(E[Rm]-Rf)
Where: Rf = risk-free interest rate
E(Rm)= the expected rate of return of the market.
The rate of return required by investors is the discount rate.
Therefore, it can be seen from the formula of the capital asset pricing model that the following variables are known to estimate the discount rate: risk-free interest rate (Rf), expected rate of return of the market (E(Rm)) and β value of assets.
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