Updated: Aug 20, 2021

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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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.