Discount


  1. A bill is discounted at 5 % per annum. If banker’s discount be allowed, at what rate of interest must the proceeds be invested, so that nothing is lost?
    1. 5%
    2. 4
      19
      %
      20

    3. 5
      5
      %
      9

    4. 10%

  1. View Hint View Answer Discuss in Forum

    Let the sum be $ 100.
    Then, B.D. = $ 5 Proceeds = $ (100 - 5) = $ 95
    ∴ $ 5 must be the interest on $ 95 for 1 year.

    Correct Option: C

    Let the sum be $ 100.
    Then, B.D. = $ 5 Proceeds = $ (100 - 5) = $ 95
    ∴ $ 5 must be the interest on $ 95 for 1 year.

    So, rate =100 x 5 = 5 5 %
    95 x 119


  1. A owes B $ 1350 due in 3 months and B owes A $ 1078 due 5 months. If they agrees to settle their account right now at 5 % p.a, A should pay to B :
    1. $ 277
      1
      3
    2. $ 288.25
    3. $ 302
    4. None of these

  1. View Hint View Answer Discuss in Forum

    According to question , we have

    P.W. of $ 1350 =1350 x 100= 1350 x 400 = $ 1,333.33
    100 + [ ( 3 / 12 ) x 5 ]405

    Correct Option: A

    According to question , we have

    P.W. of $ 1350 =1350 x 100= 1350 x 400 = $ 1,333.33
    100 + [ ( 3 / 12 ) x 5 ]405

    P.W. of $ 1078 =1078 x 100= 1078 x 1200 = $ 1056
    100 + [ ( 5 / 12 ) x 5 ]1225

    ∴ A should pay B = $ 4000 - 1056
    3

    A should pay B = $832= $ 277 1
    33



  1. The B.G. on a sum due 3 years at 10 % is $ 180. The B.D. is :
    1. $ 680
    2. $ 780
    3. $ 580
    4. $ 480

  1. View Hint View Answer Discuss in Forum

    Here , Rate = 10% , Time = 3 years , B.G. = $ 180

    T.D. =
    B.G. x 100
    = $
    180 x 100
    = $ 600
    R x T
    10 x 3

    Correct Option: B

    Here , Rate = 10% , Time = 3 years , B.G. = $ 180

    T.D. =
    B.G. x 100
    = $
    180 x 100
    = $ 600
    R x T
    10 x 3

    ∴ Banker 's Discount ( B.D. ) = True discount + Banker 's Gain ( B.G. )
    Banker 's Discount ( B.D. ) = $ (600 + 180) = $ 780.


  1. The banker’s gain on a certain sum due in 2 years at 5 % per annum is $ 8. The present worth is :
    1. $ 800
    2. $ 1600
    3. $ 1200
    4. $ 880

  1. View Hint View Answer Discuss in Forum

    Given :- Banker 's Gain = $ 8 , Rate = 5% , Time = 2 years

    True Discount =
    B.G. x 100
    = $
    8 x 100
    Rate x Time
    5 x 2

    Correct Option: A

    Given :- Banker 's Gain = $ 8 , Rate = 5% , Time = 2 years

    True Discount =
    B.G. x 100
    = $
    8 x 100
    Rate x Time
    5 x 2

    True Discount = $ 800



  1. The B.G. on a certain sum due in 5 years is 3/23 of B.D. Here, the rate of interest is :
    1. 6%
    2. 5%
    3. 4%
    4. 3%

  1. View Hint View Answer Discuss in Forum

    Let, Banker 's Discount = $ 1

    ∵ Banker 's Gain = $
    3
    23

    ∴ True Discount = Banker 's Discount - Banker 's Gain
    True Discount = $1 -
    3
    = $
    20
    2323

    Correct Option: D

    Let, Banker 's Discount = $ 1

    ∵ Banker 's Gain = $
    3
    23

    ∴ True Discount = Banker 's Discount - Banker 's Gain
    True Discount = $1 -
    3
    = $
    20
    2323

    ∴ Sum =
    B.D. x T.D.
    B.D. -T.D.

    Sum = 1 x
    20
    = $
    23
    20
    1 -
    20
    3
    23

    ∵ S.I. on $
    20
    for 5 years is $ 1
    3

    ∴ Rate of interest = 100 x 3= 3 %
    20 x 5