Legal Definitions - discount

Definition: Discount is a reduction in the price of a good or service. It can also refer to an advance deduction of interest to determine the present value of money when lending or borrowing.

Example 1: The store offered a 20% discount on all clothing items.

Example 2: The bank discounted the interest on the loan to determine the present value of the money.

These examples illustrate how a discount can be applied to a purchase or a financial transaction. In example 1, the store is offering a reduced price on clothing items, which can attract more customers and increase sales. In example 2, the bank is calculating the present value of the money by deducting the interest, which can help determine the true cost of borrowing or lending.