™An expected $110 one year from now has present value $100 at a 10% discount rate; a higher required rate lowers that present value.
Economics
Discount rate
A rate used to convert expected future cash flows into a present value.
Plain-English context
Put the definition to work.
Distinguish a valuation required return from the central bank's lending discount rate; they are different uses of the term.
Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. Federal Reserve — monetary policy