▁financial ▁mechanism ▁in ▁which ▁a ▁deb tor ▁obtain s ▁the ▁right ▁to ▁delay ▁pay ments ▁to ▁a ▁cred itor , ▁for ▁a ▁defined ▁period ▁of ▁time , ▁in ▁exchange ▁for ▁a ▁charge ▁or ▁fee . ▁Ess entially , ▁the ▁party ▁that ▁ow es ▁money ▁in ▁the ▁present ▁purch ases ▁the ▁right ▁to ▁delay ▁the ▁payment ▁until ▁some ▁future ▁date . ▁The ▁disc ount , ▁or ▁charge , ▁is ▁the ▁difference ▁between ▁the ▁original ▁amount ▁ow ed ▁in ▁the ▁present ▁and ▁the ▁amount ▁that ▁has ▁to ▁be ▁paid ▁in ▁the ▁future ▁to ▁sett le ▁the ▁deb t . ▁ ▁The ▁disc ount ▁is ▁usually ▁associated ▁with ▁a ▁disc ount ▁rate , ▁which ▁is ▁also ▁called ▁the ▁disc ount ▁yield . ▁The ▁disc ount ▁yield ▁is ▁the ▁proportional ▁share ▁of ▁the ▁initial ▁amount ▁ow ed ▁( initial ▁li ability ) ▁that ▁must ▁be ▁paid ▁to ▁delay ▁payment ▁for ▁ 1 ▁year . ▁ ▁Since ▁a ▁person ▁can ▁ear n ▁a ▁return ▁on ▁money ▁inv ested ▁over ▁some ▁period ▁of ▁time , ▁most ▁economic ▁and ▁financial ▁models ▁assume ▁the ▁disc ount ▁yield ▁is ▁the ▁same ▁as ▁the ▁rate ▁of ▁return ▁the ▁person ▁could ▁receive ▁by ▁invest ing ▁this ▁money ▁elsewhere ▁( in ▁assets ▁of ▁similar ▁risk ) ▁over ▁the ▁given ▁period ▁of ▁time ▁covered ▁by ▁the ▁delay ▁in ▁payment . ▁The ▁concept ▁is ▁associated ▁with ▁the ▁opportunity ▁cost ▁of ▁not ▁having ▁use ▁of ▁the ▁money ▁for ▁the ▁period ▁of ▁time ▁covered ▁by ▁the ▁delay ▁in ▁payment . ▁The ▁relationship ▁between ▁the ▁disc ount ▁yield ▁and ▁the