Bankers Discount: Master Competitive Exam Concepts

Bankers Discount

Q. A bill of $1500 has a Banker's Discount of $45. What is the rate of interest for 6 months?

A. 5%
B. 6%
C. 7%
D. 8%

Solution

Rate = (BD x 100) / (Principal x Time) = (45 x 100) / (1500 x 6/12) = 6%

Correct Answer: A — 5%

Q. A bill of Rs. 10000 is discounted at 5% per annum for 1 year. What is the bankers' discount?

A. Rs. 500
B. Rs. 600
C. Rs. 700
D. Rs. 800

Solution

Bankers' Discount = (10000 × 5 × 1) / 100 = Rs. 500.

Correct Answer: A — Rs. 500

Q. A bill of Rs. 10000 is due in 1 year. If the Banker's Discount is Rs. 800, what is the rate of interest?

A. 8%
B. 10%
C. 12%
D. 15%

Solution

Banker's Discount = (Face Value * Rate * Time) / 100. 800 = (10000 * Rate * 1) / 100. Rate = 8%.

Correct Answer: B — 10%

Q. A bill of Rs. 12000 is discounted at 12% per annum for 9 months. What is the bankers' discount?

A. Rs. 900
B. Rs. 1200
C. Rs. 1000
D. Rs. 800

Solution

Bankers' Discount = (12000 × 12 × 0.75) / 100 = Rs. 900.

Correct Answer: B — Rs. 1200

Q. A bill of Rs. 12000 is due in 9 months. Calculate the Banker's Discount at the rate of 15% per annum.

A. Rs. 450
B. Rs. 300
C. Rs. 600
D. Rs. 900

Solution

Banker's Discount = (12000 × 15 × 0.75) / 100 = Rs. 1350.

Correct Answer: C — Rs. 600

Q. A bill of Rs. 12000 is due in 9 months. If the bankers' discount is Rs. 900, what is the rate of interest?

A. 10%
B. 12%
C. 15%
D. 18%

Solution

Rate = (BD × 100) / (Principal × Time) = (900 × 100) / (12000 × 0.75) = 12%.

Correct Answer: B — 12%

Q. A bill of Rs. 15000 is due in 3 months. If the bankers' discount is Rs. 450, what is the rate of interest?

A. 9%
B. 10%
C. 12%
D. 15%

Solution

Rate = (BD × 100) / (Principal × Time) = (450 × 100) / (15000 × 0.25) = 12%.

Correct Answer: B — 10%

Q. A bill of Rs. 15000 is due in 3 months. What is the Banker's Discount at the rate of 8% per annum?

A. Rs. 300
B. Rs. 400
C. Rs. 200
D. Rs. 600

Solution

Banker's Discount = (15000 × 8 × 0.25) / 100 = Rs. 300.

Correct Answer: B — Rs. 400

Q. A bill of Rs. 18000 is due in 4 months. What is the Banker's Discount at the rate of 9% per annum?

A. Rs. 540
B. Rs. 360
C. Rs. 720
D. Rs. 450

Solution

Banker's Discount = (18000 × 9 × (4/12)) / 100 = Rs. 540.

Correct Answer: B — Rs. 360

Q. A bill of Rs. 20000 is due in 1 year. If the bankers' discount is Rs. 1600, what is the effective rate of interest?

A. 8%
B. 10%
C. 12%
D. 14%

Solution

Effective Rate = (BD × 100) / (Face Value × Time) = (1600 × 100) / (20000 × 1) = 8%.

Correct Answer: A — 8%

Q. A bill of Rs. 25000 is discounted at 5% per annum for 3 months. What is the bankers' discount?

A. Rs. 312.5
B. Rs. 625
C. Rs. 500
D. Rs. 750

Solution

Bankers' Discount = (25000 × 5 × 0.25) / 100 = Rs. 312.5.

Correct Answer: B — Rs. 625

Q. A bill of Rs. 25000 is due in 1 year. Calculate the Banker's Discount at the rate of 5% per annum.

A. Rs. 1250
B. Rs. 1000
C. Rs. 1500
D. Rs. 2000

Solution

Banker's Discount = (25000 × 5 × 1) / 100 = Rs. 1250.

Correct Answer: A — Rs. 1250

Q. A bill of Rs. 4000 is due in 2 months. What is the Banker's Discount at the rate of 5% per annum?

A. Rs. 33.33
B. Rs. 20
C. Rs. 50
D. Rs. 40

Solution

Banker's Discount = (4000 * 5 * 2/12) / 100 = Rs. 33.33.

Correct Answer: A — Rs. 33.33

Q. A bill of Rs. 5000 is due in 3 months. What is the Banker's Discount at the rate of 10% per annum?

A. Rs. 125
B. Rs. 100
C. Rs. 150
D. Rs. 200

Solution

Banker's Discount = (Face Value * Rate * Time) / 100 = (5000 * 10 * 3/12) / 100 = Rs. 125.

Correct Answer: A — Rs. 125

Q. A bill of Rs. 5000 is due in 6 months. What is the Banker's Discount at the rate of 10% per annum?

A. Rs. 250
B. Rs. 300
C. Rs. 500
D. Rs. 400

Solution

Banker's Discount = (Principal × Rate × Time) / 100 = (5000 × 10 × 0.5) / 100 = Rs. 250.

Correct Answer: A — Rs. 250

Q. A bill of Rs. 5000 is due in 6 months. What is the bankers' discount at the rate of 10% per annum?

A. Rs. 250
B. Rs. 300
C. Rs. 500
D. Rs. 600

Solution

Bankers' Discount = (Principal × Rate × Time) / 100 = (5000 × 10 × 0.5) / 100 = Rs. 250.

Correct Answer: A — Rs. 250

Q. A bill of Rs. 6000 is due in 9 months. If the Banker's Discount is Rs. 450, what is the rate of interest?

A. 8%
B. 9%
C. 10%
D. 11%

Solution

Banker's Discount = (Face Value * Rate * Time) / 100. 450 = (6000 * Rate * 9/12) / 100. Rate = 10%.

Correct Answer: C — 10%

Q. A bill of Rs. 7000 is due in 1 year. If the Banker's Discount is Rs. 700, what is the rate of interest?

A. 10%
B. 12%
C. 14%
D. 16%

Solution

Banker's Discount = (7000 * Rate * 1) / 100. 700 = (7000 * Rate) / 100. Rate = 10%.

Correct Answer: B — 12%

Q. A bill of Rs. 8000 is discounted at 15% per annum for 3 months. What is the bankers' discount?

A. Rs. 300
B. Rs. 200
C. Rs. 100
D. Rs. 400

Solution

Bankers' Discount = (8000 × 15 × 3/12) / 100 = Rs. 300.

Correct Answer: A — Rs. 300

Q. A bill of Rs. 8000 is due in 2 months. If the bankers' discount is Rs. 160, what is the rate of interest?

A. 9%
B. 10%
C. 12%
D. 15%

Solution

Rate = (BD × 100) / (Principal × Time) = (160 × 100) / (8000 × 1/6) = 12%.

Correct Answer: A — 9%

Q. A loan of $6000 is taken for 3 years at a bankers discount of 15%. What is the total discount?

A. $2700
B. $270
C. $600
D. $900

Solution

Total Discount = (6000 × 15 × 3) / 100 = $2700.

Correct Answer: A — $2700

Q. A sum of $12000 is due in 5 years. If the bankers discount is $3000, what is the rate of interest?

A. 5%
B. 6%
C. 7%
D. 8%

Solution

Bankers Discount = Principal - Present Value. Present Value = 12000 - 3000 = 9000. Rate = (3000 × 100) / (12000 × 5) = 5%.

Correct Answer: B — 6%

Q. A sum of $25000 is due in 2 years. If the bankers discount is $5000, what is the rate of interest?

A. 8%
B. 10%
C. 12%
D. 15%

Solution

Rate = (5000 × 100) / (25000 × 2) = 10%.

Correct Answer: B — 10%

Q. A sum of $5000 is due in 2 years. What is the bankers discount at the rate of 10%?

A. $100
B. $200
C. $300
D. $400

Solution

Bankers Discount = (Principal × Rate × Time) / 100 = (5000 × 10 × 2) / 100 = $1000. The present value is $5000 / (1 + 0.10)^2 = $4132.23. Therefore, Bankers Discount = $5000 - $4132.23 = $867.77.

Correct Answer: B — $200

Q. Calculate the Banker's Discount on a loan of $1200 for 6 months at an interest rate of 5%.

A. $30.00
B. $25.00
C. $20.00
D. $15.00

Solution

Banker's Discount = (1200 x 5 x 6/12) / 100 = $30.00

Correct Answer: B — $25.00

Q. Calculate the maturity value of a bill of $4000 with a Banker's Discount of $200 for 6 months.

A. $3800
B. $4000
C. $4200
D. $4400

Solution

Maturity Value = Principal + BD = 4000 + 200 = $4200

Correct Answer: C — $4200

Q. Find the Banker's Discount on a sum of $2000 due in 1 year at a rate of 10%.

A. $200
B. $150
C. $100
D. $250

Solution

Banker's Discount = (2000 x 10 x 1) / 100 = $200

Correct Answer: A — $200

Q. If a bill of Rs. 15000 is discounted at 8% per annum for 6 months, what is the bankers' discount?

A. Rs. 600
B. Rs. 800
C. Rs. 1000
D. Rs. 1200

Solution

Bankers' Discount = (15000 × 8 × 0.5) / 100 = Rs. 600.

Correct Answer: B — Rs. 800

Q. If a bill of Rs. 20000 is discounted at 15% per annum for 4 months, what is the bankers' discount?

A. Rs. 1000
B. Rs. 1200
C. Rs. 1500
D. Rs. 2000

Solution

Bankers' Discount = (20000 × 15 × 1/3) / 100 = Rs. 1000.

Correct Answer: C — Rs. 1500

Q. If the Banker's Discount on a bill of $800 is $16, what is the rate of interest for 4 months?

A. 5%
B. 6%
C. 7%
D. 8%

Solution

Rate = (BD x 100) / (Principal x Time) = (16 x 100) / (800 x 4/12) = 6%

Correct Answer: B — 6%

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