Word: Bank Discount
Definition: The term "bank discount" refers to the interest that a bank takes from a loan amount before giving the money to the borrower. This means that when you take out a loan, the bank subtracts the interest from the total amount upfront. So, you receive less money than you are technically borrowing, and you will pay back the full amount over time.
In more complex financial contexts, "bank discount" may relate to specific calculations used in determining the present value of future cash flows or investments. For example, when pricing bonds or other financial assets, investors may calculate the bank discount to understand the effective yield on their investment.
In different contexts, "discount" can also refer to: - A reduction in price (e.g., store discounts). - A term used in accounting to represent a decrease in value.
While "bank discount" doesn't have specific idioms or phrasal verbs directly related to it, you might encounter phrases like: - "Paying the price": This can imply that you must deal with the consequences of a financial decision, similar to understanding the costs of a bank discount.
In summary, "bank discount" is a financial term that describes the interest deducted from a loan amount before it is disbursed to the borrower.