One of the mysteries of the English language finally explained.
Interest computed on the face value of a loan and deducted in advance from the loan by the lending bank.
- ‘For example, the bank discount method is used for Treasury bills sold by the U.S. government and commercial paper issued by businesses.’
- ‘If a bank customer obtains such an insurance quote, the bank will provide bank discounts on bank service fees for bank products to such customer.’
- ‘The bank discount rate might also be tied to the amount of monthly charges.’
- ‘Since we computed the bank discount rate from the dollar discount and the investment, all we have to do is reverse the process.’
- ‘The bank discount rate normalizes by the face value of the security (for example, U. S. Treasury Bills) and understates the true yield earned by investors.’
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