Periodic discount rate

A rate of return - or cost of borrowing - expressed as:

• The excess of the amount at the end over the amount at the start
• Divided by the amount at the end

Example 1

GBP 1 million is borrowed.

GBP 1.03 million is repayable at the end of the period.

The periodic discount rate (d) is:

(End amount - start amount) / End amount

= (1.03 - 1) - 1.03

= 0.029126

= 2.9126%

See also

• Annual effective rate
• Discount rate
• Periodic yield
• Yield