" ▁whenever ▁the ▁time ▁period ▁of ▁the ▁payment ▁is ▁delayed ▁or ▁extended . ▁The ▁" dis count ▁rate " ▁is ▁the ▁rate ▁at ▁which ▁the ▁" dis count " ▁must ▁grow ▁as ▁the ▁delay ▁in ▁payment ▁is ▁extended . ▁This ▁fact ▁is ▁directly ▁tied ▁into ▁the ▁time ▁value ▁of ▁money ▁and ▁its ▁calculations . ▁ ▁The ▁" time ▁value ▁of ▁money " ▁indicates ▁there ▁is ▁a ▁difference ▁between ▁the ▁" f uture ▁value " ▁of ▁a ▁payment ▁and ▁the ▁" present ▁value " ▁of ▁the ▁same ▁payment . ▁The ▁rate ▁of ▁return ▁on ▁invest ment ▁should ▁be ▁the ▁dominant ▁factor ▁in ▁evalu ating ▁the ▁market ' s ▁assess ment ▁of ▁the ▁difference ▁between ▁the ▁future ▁value ▁and ▁the ▁present ▁value ▁of ▁a ▁payment ; ▁and ▁it ▁is ▁the ▁market ' s ▁assess ment ▁that ▁counts ▁the ▁most . ▁Therefore , ▁the ▁" dis count ▁yield ", ▁which ▁is ▁pred et erm ined ▁by ▁a ▁related ▁return ▁on ▁invest ment ▁that ▁is ▁found ▁in ▁the ▁financial ▁mark ets , ▁is ▁what ▁is ▁used ▁within ▁the ▁time - value - of - m oney ▁calculations ▁to ▁determine ▁the ▁" dis count " ▁required ▁to ▁delay ▁payment ▁of ▁a ▁financial ▁li ability ▁for ▁a ▁given ▁period ▁of ▁time . ▁ ▁Basic ▁calculation ▁If ▁we ▁consider ▁the ▁value ▁of ▁the ▁original ▁payment ▁presently ▁due ▁to ▁be ▁P , ▁and ▁the ▁deb tor ▁wants ▁to ▁delay ▁the ▁payment ▁for ▁t ▁years , ▁then ▁a ▁market ▁rate ▁of ▁return ▁denoted ▁r ▁on ▁a ▁similar ▁invest ment ▁asset ▁means ▁the