Discount Rate Definition – Practical Example of Discount Rate and Discount Rate Formula

Introduction: Discount Rate is the most common variable studied in the field of accountancy/business, as it encapsulates an interest rate marked over commercial banks and other financial institutions for the amount received on the behalf of Federal Reserve’s discount opening. It’s the same rate, which finance professionals use while generating ‘discounted cash flow’ and it’s … Read more

Compensating Balance and its benefits

Introduction: The finance professionals have labeled ‘compensating balance’ as the most minimal amount of balance that needs to be maintained in order to keep the account running. It should be in our best interest that compensating balances are commonly used to overcome the unbalanced portion of the expense that banks might experience when extending the … Read more