Banker's Discount problems
- 1. The banker's gain on a certain sum due 2 1/ 2 years hence is 2/23 of the banker's discount on it for the same time and at the same rate. Find the rate percent?
Options- A. 5%
- B. 4%
- C. 8%
- D. 6% Discuss
Correct Answer: 6%
Explanation:
Rate percent = 100 x 2/5/ [ 3/(23 - 3)] = 6%
- 2. Find the bankar's discount at a bill of ? 12750 due four months hence when rate of interest is 6% per annum?
Options- A. ? 250
- B. ? 120
- C. ? 255
- D. ? 300 Discuss
Correct Answer: ? 255
Explanation:
Given That, A = ? 12750, R = 6%
and T = 4 Months = 4/12 = 1/3 yr , BD = ?
According to the formula,
BD = (A x R x T)/100
= [12750 x 6 x (1/3)] / 100
= (12750 x 2) / 100
= ? 255
- 3. The true discount at a bill of ? 7440 due 16 months, hence is ? 240. Find the banker's gain?
Options- A. ? 10
- B. ? 6
- C. ? 4
- D. ? 8 Discuss
Correct Answer: ? 8
Explanation:
Present worth of bill = ? (7440 - 240) = ? 7200
? Banker's Gain (BG) = (TD)2/PW
= (240 x 240) / 7200
= 576/72
= ? 8
- 4. The banker's gain of a sum due 8 yr. hence at 24% per annum, is ? 144. Find the present worth of that bill?
Options- A. ? 39.06
- B. ? 45
- C. ? 38.06
- D. ? 50 Discuss
Correct Answer: ? 39.06
Explanation:
Given that BG = ? 144 , R = 24%
T = 8 yr and PW = ?
According to the formula,
PW = BG x [100/(R x T)]2
= 144 x [100/(24 x 8)]2
= 144 x (100/192) x (100/192)
= ? 39.06
- 5. If the banker's discount and banker's gain on a certain bill, are ? 196 and ? 28, respectively. Find the amount of bill .
Options- A. ? 1200
- B. ? 1376
- C. ? 1176
- D. ? 1400 Discuss
Correct Answer: ? 1176
Explanation:
Given that, BD = ? 196 and BG = ? 28
? TD = BD - BG = 196 - 28 = ? 168
According to the formula,
A = (BD x TD)/BG = (196 x 168)/28
= 196 X 6
= ? 1176
- 6. The present worth of a sum due sometimes hence is Rs. 576 and the banker's gain is Re. 1. The true discount is?
Options- A. Rs. 16
- B. Rs. 18
- C. Rs. 24
- D. Rs. 32 Discuss
Correct Answer: Rs. 24
Explanation:
T.D. = ?(P.W.) X {(B.G.)
= ?(576 x 1) = Rs. 24
- 7. The banker's gain on a bill due 1 year hence at 5% is Re. 1. The true discount is?
Options- A. ? 15
- B. ? 20
- C. ? 25
- D. ? 5 Discuss
Correct Answer: ? 20
Explanation:
T.D. = (B.G x 100) / (R x T)
= (1 x 100) / (5 x 1)
= ? 20
- 8. Find the banker's discount on a bill due 3 years hence at 5% being given that the banker's gain is Rs. 90?
Options- A. Rs. 550
- B. Rs. 650
- C. Rs. 690
- D. Rs. 600 Discuss
Correct Answer: Rs. 690
Explanation:
T.D. = (90 x 100) / (3 x 5) = Rs. 600
? Banker's discount = True discount + Banker's gain
= Rs. 600 + Rs. 90
= Rs. 690
- 9. The banker's gain on a bill due 2 years hence at 5% is Rs. 8, find the present worth of the bill?
Options- A. Rs. 800
- B. Rs. 650
- C. Rs. 750
- D. Rs. 850 Discuss
Correct Answer: Rs. 800
Explanation:
P.W. = [8 x 100 x 100] / [10 x 10]
= Rs. 800
- 10. The true discount on a bill for Rs. 2520 due 6 months hence at 10 % per annum is :
Options- A. Rs. 180
- B. Rs. 140
- C. Rs. 80
- D. Rs. 120 Discuss
Correct Answer: Rs. 120
Explanation:
Given in the question,
Face Value = 2520;
Time = 6 months = 1/2 year
Rate of interest = 10 %
As we know the formula,
True Discount = Face Value x ( Rate of Interest x Time in years ) / ( 100 + Rate of interest x Time )
? True Discount = 2520 x (10 x 1/2 ) / (100 + (10 x 1/2 ))
? True Discount = 2520 x ( 5 ) / (100 + ( 5 ))
? True Discount = 2520 x 5 /105
? True Discount = 2520 / 21
? True Discount = Rs. 120
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