The rate of discount is the interest rate charged on discounted bills or loans. It is an important factor to consider when borrowing money, as it will affect the total amount of interest you pay over the life of the loan.
The rate of discount has been used for centuries as a way to finance trade and commerce. In the early days of banking, merchants would often borrow money from banks to finance their business ventures. The banks would charge a rate of discount on these loans, which was based on the risk of the loan and the bank’s cost of funds.