What is the meaning of ‘pretty penny’?

The expression is mostly used in informal contexts in American English. When you say that something cost someone a pretty penny, what you mean is that it cost the individual a considerable sum of money. In other words, it was very expensive.

*That new car of his must have cost him a pretty penny.

‘Pretty’ in this context has nothing to do with looks; it means ‘considerable’. A ‘penny’ is a one cent coin, and in the expression, it is used to represent money. So when you say ‘pretty penny’ you mean ‘considerable money’. The expression ‘cost a pretty penny’ was first used in 1768, and at that time you could buy a lot of things with a penny.

Source: ‘Know Your English’ – “The Hindu”  on Dec. 04, 2007

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