The discount rate refers to the interest rate used when calculating the net present value (NPV) of an investment. It represents the time value of money, which is the concept that a sum of money today ...

Vol. 94, No. 2, Papers and Proceedings of the One Hundred Sixteenth Annual Meeting of the American Economic Association San Diego, CA, January 3-5, 2004 (May, 2004), pp. 119-125 (7 pages) The American ...