time discount: meaning, definition, pronunciation and examples
C1Formal, Technical (Finance/Economics)
Quick answer
What does “time discount” mean?
A reduction in price offered for payment made before the standard due date.
Audio
Pronunciation
Definition
Meaning and Definition
A reduction in price offered for payment made before the standard due date.
A financial concept where the present value of future cash flows is reduced, reflecting the time value of money; in behavioral economics, the tendency to devalue rewards that are delayed.
Dialectal Variation
British vs American Usage
Differences
No significant difference in core meaning. 'Discount for early payment' is a common alternative phrasing in general business contexts in both regions.
Connotations
In both varieties, the term carries precise financial/economic connotations. It is neutral and technical.
Frequency
Slightly higher frequency in American financial journalism and corporate communications. In the UK, 'prompt payment discount' is a common near-synonym in commercial invoices.
Grammar
How to Use “time discount” in a Sentence
The supplier offers a [time discount] for payment within 10 days.Investors use a [time discount] to value future earnings.[Time discount] is applied to the invoice.Vocabulary
Collocations
Examples
Examples of “time discount” in a Sentence
verb
British English
- The treasurer will time-discount the projected revenues.
- We need to time-discount these future cash flows.
American English
- The analyst time-discounted the earnings stream.
- Always time-discount long-term liabilities.
adverb
British English
- The cash flows were valued time-discountedly.
- (Rare usage; typically periphrased: 'after applying a time discount')
American English
- (Rare usage; typically periphrased: 'on a time-discounted basis')
adjective
British English
- The time-discount factor was set at 5%.
- They agreed on a time-discount arrangement.
American English
- The model requires a time-discount rate.
- We reviewed the time-discount policy.
Usage
Meaning in Context
Business
Supplier invoices often include a time discount, e.g., '2/10, net 30' (2% discount if paid within 10 days).
Academic
The study examined hyperbolic time discounting in consumer decision-making.
Everyday
Less common. Might be paraphrased as 'a discount for paying early'.
Technical
A key variable in Net Present Value (NPV) and Discounted Cash Flow (DCF) models.
Vocabulary
Synonyms of “time discount”
Strong
Neutral
Watch out
Common Mistakes When Using “time discount”
- Using 'time discount' to mean a limited-time sale (correct: 'flash sale', 'limited-time offer').
- Confusing 'time discount' (for payment) with 'quantity discount' (for volume).
FAQ
Frequently Asked Questions
No. A 'time discount' is specifically for early payment of an owed amount. A 'sale' or 'promotional discount' is a reduction in the initial selling price.
A 'time discount' is the general concept or the specific reduction offered. The 'discount rate' is the specific percentage or factor used to calculate that reduction in present value.
Yes, in technical finance contexts (e.g., 'to time-discount future revenue'), but it is less common than the noun form.
An invoice for £1000 with terms '5/15, net 60' means you can pay £950 (£1000 less a 5% time discount) if you pay within 15 days, otherwise the full £1000 is due in 60 days.
Time discount is usually formal, technical (finance/economics) in register.
Time discount: in British English it is pronounced /ˈtaɪm ˌdɪs.kaʊnt/, and in American English it is pronounced /ˈtaɪm ˌdɪs.kaʊnt/. Tap the audio buttons above to hear it.
Phrases
Idioms & Phrases
- “The time discount on that project is steep, reflecting the high risk.”
- “Don't forget to factor in the time discount when evaluating the long-term contract.”
Learning
Memory Aids
Mnemonic
TIME DISCOUNT: Think "Time is Money". A discount related to TIME (when you pay).
Conceptual Metaphor
FUTURE VALUE IS A DISTANT OBJECT (devalued by the distance/time).
Practice
Quiz
In the commercial term '2/10, net 30', what does the '2' represent?