Where does the term nickel and dime come from?

Answer 1

Nickels:

In the mid-19th century the U.S. struck two denominations of coins simultaneously in both silver and copper-nickel: there were 3¢ pieces intended for buying stamps, and 5¢ pieces. Silver 5¢ pieces were formally called half-dimes but the new nickel coins didn't have a name. The practice for telling 3¢ pieces apart was to call them "3 cents silver" and "3 cents nickel", so the new 5¢ coins be came known as "5 cents nickel" which got corrupted to "5 cent nickels". When the 3¢ coins were abolished due to low use and half-dimes were discontinued, the name for the copper-nickel coins stuck. There was no need to say the denomination anymore because there were no more 3 cent coins to cause confusion, and the nickname was shortened to just nickel.

Dimes:

The U.S. originally planned to have a coin system more like the old British one, except based on 10s instead of 12s. Each primary unit would be worth 10 times the next smaller denomination.

The basic denomination was the dollar, just like today. France had just introduced 10-based coins and measurements, so their choices influenced the U.S. The cent got its name from the French term for 1/100th, and similarly there was to be a coin called a "disme" (DIZ-muh) whose name came from the French word for 1/10th ("dixième"). "Disme" was an unfamiliar pronunciation for English speakers so the S was soon dropped and the word's pronunciation changed.

Prices were supposed to be written in dollars, dimes, and cents in the same way that British prices were done in pounds, shillings, and pence. That meant you might see something tagged as 3.5.4 or 3/5/4, meaning 3 dollars, 5 dimes, and 4 cents. Fortunately Thomas Jefferson was convinced that using ordinary decimal notation would make things a lot easier so prices were soon expressed only in dollars and cents. However the denomination "dime" was never removed from the coinage system and we still have it today as a relic of the past.

FWIW the quarter is also a relic of the past. Most countries using decimal coins have 20¢ coins so that everything is divisible by 2 and 5, the factors of 10. However the U.S. allowed Spanish dollars to circulate alongside U.S. dollars until 1857. Spanish dollars were divided into 8 "bits", so the U.S. issued 25¢ coins (two bits!) to help with change-making. By the 1870s when the Mint realized that a 20¢ piece should have been issued, the quarter was too ingrained in commerce, and like the word dime we're stuck with 25 cent coins to this day.