A reduction in price. A cash discount or a discount for prompt payment is a reduction in price allowed to customers who pay cash, or pay promptly. A security stands at a discount if its present market price is below the price at which it is due to be redeemed. The present discounted value of payments due to be received at a future date is found by reducing them by percentage per period, for each period by which the receipt is delayed. Discounting bills of exchange means buying at a reduced price the right to receive payment when it becomes due. Ue. See also cash discount; quantity discount.
Reference: Oxford Press Dictonary of Economics, 5th edt.
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