The present worth of a bill due sometime hence is Rs. 1100 and the true discount on the bill is Rs. 110. Find the banker's discount and the extra gain the banker would make in the transaction?
Correct Answer: Rs. 11, Rs. 121
Explanation:
T.D. = √P.W. x B.G.
or B.G. = (T.D.)2/P.W. = (110 X 110) / 1100 = Rs. 11
∴ B.D. = B.G. + T.D. = Rs. (11 + 110) = Rs. 121
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