bank discount

from The American Heritage® Dictionary of the English Language, 5th Edition.

• noun The interest on a loan computed in advance and deducted at the time the loan is made.

from the GNU version of the Collaborative International Dictionary of English.

• A sum equal to the interest at a given rate on the principal (face) of a bill or note from the time of discounting until it becomes due.

from WordNet 3.0 Copyright 2006 by Princeton University. All rights reserved.

• noun interest on an annual basis deducted in advance on a loan