While you can generally deduct interest payments and discount points (pre-paid interest) on a qualifying home mortgage if you itemize, you may not deduct processing fees as deductible expenses.
And the cost to the supplier of immediate cash payment by the bank, in respect of the implicit interest rate or discount on the bill, ought to be tiny - because the bank is in effect lending to the safe big company, which ultimately honours the bill, not to the riskier supplier.
Low interest rates reduce the discount rate on corporate earnings and cash flow, raising their present value.
Some sponsors give you the option of selling back your interest at a small discount--say, 97.5% of your investment.
Interest rates are used to discount those cash flows and calculate their present value.
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Korean giant Samsung is offering its entire line on a two-year installment basis at zero interest -- an effective discount of 20% based on current financing costs.
The interest rate allows me to discount the value of some cash payment in the future to the value the principle would hold for me if I had it now.
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As a result of the power of compound interest, the choice of discount rate used to estimate the potential economic costs of climate change is more important for purposes of understanding the trade-offs associated with competing climate-change policy options than perhaps any other single issue in climate change economics.
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The discount rate is the interest rate that the central bank charges commercial banks that need to borrow additional reserves.
The Fed's decision means that the discount rate, the interest rate that the Fed charges to make direct loans to banks will be lowered to 5.75 percent from 6.25 percent.
In addition to cutting the funds rate, the Fed announced it was reducing its discount rate, the interest it charges to make direct loans to banks, by a quarter-point, as well, to 4.75 percent.
Factoring (selling receivables for a discount) often incurs comparable interest.
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If Washington can agree on something or at least push out the day of reckoning, bank stocks must start to discount the end to net interest margin depression, a big plus dwelling in the cards.
The same day, the then-73-year- old Jones gave his children a majority interest in the partnerships, claiming an average 62% discount.
As the storm gathered during 2008, the Fed aggressively eased monetary policy by using such open market operations (supplemented by discount rate reductions) to drive short-term interest rates to near-zero levels.
In particular, the low insider interest may mean that stocks are not trading at a good discount to their net asset value, or there are poor earnings prospects in the view of company directors.
Eventually, interest rates will rise and we will have to address the debt problem (though rising interest rates allow us to buy back our debt at a discount, reducing the debt), as long-term debt can hamper jobs growth, but today we need to address our jobs problem.
Instead of owning one, own index futures, which trade at a discount whenever stock yields are higher than short-term interest rates.
If QE2 succeeds, interest rates will eventually increase as the Federal Reserve will raise the discount rate to ensure economic growth and the likely resulting inflation does not overshoot its targets.
Interest from credit loans account for 66% of its net revenues whereas discount fees charged from merchants accepting its cards account for another 16%.
There was also some interest-rate liberalization as Chinese banks are now allowed to lend at a discount of up to 20% below the benchmark, compared with a previous floor of 10%.
Pound futures are trading at a discount to spot prices, a reflection of the fact that short-term interest rates are higher in London than they are here.
But the higher discount revenues, travel commissions, and overall fees are expected to offset the lower net interest income.
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In its latest incarnation, the interest-rate ceiling on consumer loans is restricted to 5% above the Federal Reserve's discount rate the amount the Fed charges banks for overnight loans.
The idea is to pick up mortgages at a steep discount from the banks and leave the owners in their homes by offering them new loans with reduced interest payments and principal amounts.
Three factors determine the health of any pension fund: asset returns, company contributions and the discount rate, which is used to calculate the present value of pension liabilities and is tied to interest rates.
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Because the dividends on Laffer Shares would vary depending upon GDP growth rates, the markets would discount the expected cash flows at an equity rate of return, which is considerably higher than the interest rate on government bonds.
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To put it another way, the Bank is saying that in a business-as-usual way, with no stigma attached and at a cheaper interest rate, it will provide the funds that till now it would only provide through its so-called discount window - which is where banks go to borrow in an embarrassing emergency.
If shares change in value, that must reflect a change in investors' assessment of either the prospective dividend flow (for example, because of fears about the future level of profits) or the right discount rate (for example, because of a change in inflationary prospects or in long-term real interest rates), or both.
On Friday, the ECB announced that it was reducing its benchmark interest rate to a record low 0.75 percent, down from 1 percent, while the PBOC lowered interest rates on one-year loans from 6.31 percent to 6 percent, and said that banks can discount rates by as much as 30 percent below that benchmark, an increase from the previously allowed 20 percent.
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