Students of BBA, MBA and other business students are frequently used this term "discount rate". So what is it?

Discount Rate

The interest rate charged to borrowers, commercial banks and other depository institutions for loans received from the Central Bank and other Bank’s. 

This is the minimum interest rate set by the central bank (and some other national banks) for lending to other banks.

It is used to findout the present value of a future cash flow. Simply the interest rate is called the discount rate.

It is a rate used for discounting bills of exchange.

The discount rate also refers to the interest rate used in discounted cash flow (DCF) analysis to determine the present value of future cash flows.

The discount rate in DCF analysis takes into account not just the time value of money, but also the risk or uncertainty of future cash flows; the greater the uncertainty of future cash flows, the higher the discount rate.

Another meaning of the term “discount rate” is the rate used by pension plans and insurance companies for discounting their liabilities.