▁rate ▁of ▁return ▁on ▁other ▁financial ▁assets ▁is ▁usually ▁discussed ▁in ▁economic ▁and ▁financial ▁theories ▁involving ▁the ▁inter - relation ▁between ▁various ▁market ▁prices , ▁and ▁the ▁achiev ement ▁of ▁P are to ▁optim ality ▁through ▁the ▁operations ▁in ▁the ▁capital istic ▁price ▁mechanism , ▁as ▁well ▁as ▁in ▁the ▁discussion ▁of ▁the ▁efficient ▁( fin an cial ) ▁market ▁hypothesis . ▁The ▁person ▁delay ing ▁the ▁payment ▁of ▁the ▁current ▁li ability ▁is ▁essentially ▁compens ating ▁the ▁person ▁to ▁whom ▁he / she ▁ow es ▁money ▁for ▁the ▁lost ▁re venue ▁that ▁could ▁be ▁earned ▁from ▁an ▁invest ment ▁during ▁the ▁time ▁period ▁covered ▁by ▁the ▁delay ▁in ▁payment . ▁According ly , ▁it ▁is ▁the ▁relevant ▁" dis count ▁yield " ▁that ▁determ ines ▁the ▁" dis count ", ▁and ▁not ▁the ▁other ▁way ▁around . ▁ ▁As ▁indicated , ▁the ▁rate ▁of ▁return ▁is ▁usually ▁calculated ▁in ▁accord ance ▁to ▁an ▁annual ▁return ▁on ▁invest ment . ▁Since ▁an ▁invest or ▁ear ns ▁a ▁return ▁on ▁the ▁original ▁principal ▁amount ▁of ▁the ▁invest ment ▁as ▁well ▁as ▁on ▁any ▁prior ▁period ▁invest ment ▁income , ▁invest ment ▁ear nings ▁are ▁" comp ounded " ▁as ▁time ▁adv ances . ▁Therefore , ▁considering ▁the ▁fact ▁that ▁the ▁" dis count " ▁must ▁match ▁the ▁benefits ▁obtained ▁from ▁a ▁similar ▁invest ment ▁asset , ▁the ▁" dis count ▁yield " ▁must ▁be ▁used ▁within ▁the ▁same ▁comp ounding ▁mechanism ▁to ▁negoti ate ▁an ▁increase ▁in ▁the ▁size ▁of ▁the ▁" dis count