the wholesaler might not be willing to wait until the end of the period for payment. In this case the wholesaler can sell the retailer’s IOUs at a discount (for less than the amount that the retailer promises to pay at the end of the period). The discount is effectively interest that the wholesaler is willing to give up to get the funds earlier than promised. Usually it will be a financial institution that buys the IOU at a discount called “discounting” the IOU (this is where the term “discount window”
