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American Dictionary of the English Language

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Discount


DISCOUNT, noun [See Count. Literally, a counting back or from.]

1. A sum deducted for prompt or advanced payment; an allowance or deduction from a sum due, or from a credit; a certain rate per cent deducted from the credit price of goods sold, on account of prompt payment; or any deduction from the customary price, or from a sum due or to be due at a future time. Thus the merchant who gives a credit of three months will deduct a certain rate per cent for payment in hand, and the holder of a note or bill of exchange will deduct a certain rate per cent of the amount of the note or bill for advanced payment, which deduction is called a discount

2. Among bankers, the deduction of a sum for advanced payment; particularly, the deduction of the interest on a sum lent, at the time of lending. The discounts at banking institutions are usually the amount of legal interest paid by the borrower, and deducted from the sum borrowed, at the commencement of the credit.

3. The sum deducted or refunded; as, the discount was five per cent.

4. The act of discounting. A note is lodged in the bank for discount The banks have suspended discounts.

DISCOUNT, verb transitive

1. To deduct a certain sum or rate per cent from the principal sum. Merchants discount five or six per cent, for prompt or for advanced payment.

2. To lend or advance the amount of, deducting the interest or other rate per cent from the principal, at the time of the loan or advance. The banks discount notes and bills of exchange, on good security.

The first rule--to discount only unexceptionable paper.

DISCOUNT, verb intransitive To lend or make a practice of lending money, deducting the interest at the time of the loan. The banks discount for sixty or ninety days, sometimes for longer terms.