Bank Discount (Noun)
Meaning
Interest on an annual basis deducted in advance on a loan.
Classification
Nouns denoting possession and transfer of possession.
Examples
- The lender applied a bank discount of 10% on the loan, resulting in the borrower receiving a reduced amount upfront.
- To calculate the interest in advance, the bank used the bank discount method, deducting the interest from the loan amount before disbursing it.
- The bank discount rate of 12% per annum was deducted from the loan, meaning the borrower would have to repay the full amount plus the remaining interest.
- By using the bank discount formula, the borrower was able to determine the interest amount that would be deducted in advance on the loan.
- The loan agreement stated that the lender would deduct a bank discount of 9% on an annual basis from the loan amount, resulting in a lower upfront payment for the borrower.