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Translation

bank discount

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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.

Usage Instructions
  • Use "bank discount" when discussing loans, particularly in banking or finance contexts.
  • It is often used in relation to short-term loans or financial instruments like treasury bills.
Example
  • If you take out a loan of $1,000 with a bank discount of 10%, you will receive $900 immediately, but you will have to pay back the full $1,000 later.
Advanced Usage

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.

Word Variants
  • Bank Discount Rate: This is the percentage of interest deducted by the bank from the loan amount.
  • Discounted Cash Flow: This refers to a valuation method that estimates the value of an investment based on its expected future cash flows, adjusted for time and risk.
Different Meanings

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.

Synonyms
  • Prepaid interest
  • Interest deduction
  • Upfront interest
Idioms and Phrasal Verbs

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.

Summary

In summary, "bank discount" is a financial term that describes the interest deducted from a loan amount before it is disbursed to the borrower.

Noun
  1. interest on an annual basis deducted in advance on a loan

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