Bankers Discount: Master Competitive Exam Concepts

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Bankers Discount

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Bankers Discount MCQ & Objective Questions

The concept of Bankers Discount is crucial for students preparing for various school and competitive exams. Understanding this topic not only enhances your mathematical skills but also boosts your confidence in tackling objective questions. Practicing MCQs related to Bankers Discount helps in reinforcing concepts and improves your chances of scoring better in exams. With a focus on important questions and practice questions, you can master this topic effectively.

What You Will Practise Here

Definition and explanation of Bankers Discount
Key formulas related to Bankers Discount
Calculation methods for determining Bankers Discount
Examples of Bankers Discount in real-life scenarios
Comparison between Bankers Discount and other discount types
Common applications of Bankers Discount in finance
Practice questions and solutions for better understanding

Exam Relevance

Bankers Discount is a significant topic in various examinations, including CBSE, State Boards, NEET, and JEE. Students often encounter questions that require them to calculate discounts or understand the implications of Bankers Discount in financial contexts. Common question patterns include direct calculations, theoretical explanations, and application-based scenarios, making it essential for students to grasp this concept thoroughly.

Common Mistakes Students Make

Confusing Bankers Discount with other types of discounts
Incorrect application of formulas during calculations
Overlooking the time value of money in discount calculations
Misinterpretation of question requirements in MCQs

FAQs

Question: What is Bankers Discount?
Answer: Bankers Discount is the difference between the face value of a bill and its present value, which is calculated based on the interest rate and time period.

Question: How is Bankers Discount calculated?
Answer: It is calculated using the formula: Bankers Discount = Face Value x Rate x Time.

Now is the time to enhance your understanding of Bankers Discount! Dive into our practice MCQs and test your knowledge to ensure you are well-prepared for your exams. Remember, consistent practice leads to success!

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 loan of $8000 is taken for 3 years at a Banker's Discount of 15%. What is the total discount?

A. $3600
B. $2400
C. $1200
D. $1800

Solution

Banker's Discount = 8000 x 15/100 x 3 = $3600.

Correct Answer: B — $2400

Q. A loan of $8000 is taken for 4 years at a Banker's Discount of $960. What is the rate of interest?

A. 2%
B. 3%
C. 4%
D. 5%

Solution

Rate = (Banker's Discount / (Principal × Time)) × 100 = (960 / (8000 × 4)) × 100 = 3%.

Correct Answer: C — 4%

Q. A sum of $10000 is borrowed for 5 years. If the Banker's Discount is $2500, what is the effective interest rate?

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

Solution

Effective Interest Rate = (Banker's Discount / Principal) × 100 = (2500 / 10000) × 100 = 25%.

Correct Answer: D — 8%

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 $1500 is due in 3 years. If the Banker's Discount is $225, what is the rate of interest?

A. 4%
B. 5%
C. 6%
D. 7%

Solution

Rate = (Banker's Discount / (Principal × Time)) × 100 = (225 / (1500 × 3)) × 100 = 5%.

Correct Answer: B — 5%

Q. A sum of $1500 is due in 4 years. If the banker's discount is $240 at 6% per annum, what is the present worth?

A. $1260
B. $1300
C. $1400
D. $1500

Solution

Banker's Discount = P × R × T / 100. 240 = P × 6 × 4 / 100. P = $1260.

Correct Answer: A — $1260

Q. A sum of $1500 is due in 5 years. If the Banker's Discount is $300, what is the rate of interest?

A. 4%
B. 5%
C. 6%
D. 3%

Solution

Banker's Discount = Principal x Rate x Time; 300 = 1500 x Rate x 5; Rate = 4%.

Correct Answer: B — 5%

Q. A sum of $2500 is due in 3 years. If the banker's discount is $300 at 4% per annum, what is the present worth?

A. $2200
B. $2300
C. $2400
D. $2500

Solution

Banker's Discount = P × R × T / 100. 300 = P × 4 × 3 / 100. P = $2400.

Correct Answer: C — $2400

Q. A sum of $2500 is due in 3 years. If the Banker's Discount is $300, what is the rate of interest?

A. 4%
B. 5%
C. 6%
D. 7%

Solution

Rate = (Banker's Discount / (Principal × Time)) × 100 = (300 / (2500 × 3)) × 100 = 4%.

Correct Answer: B — 5%

Q. A sum of $2500 is due in 3 years. If the Banker's Discount is $450, what is the rate of interest?

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

Solution

Rate = (Banker's Discount / (Principal × Time)) × 100 = (450 / (2500 × 3)) × 100 = 6%.

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 $4000 is borrowed for 2 years at a Banker's Discount of $320. What is the rate of interest?

A. 4%
B. 5%
C. 6%
D. 8%

Solution

Rate = (Banker's Discount / (Principal × Time)) × 100 = (320 / (4000 × 2)) × 100 = 4%.

Correct Answer: C — 6%

Q. A sum of $4000 is borrowed for 2 years at a Banker's Discount of $800. What is the effective interest rate?

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

Solution

Effective interest rate = (Banker's Discount / Principal) × (1 / Time) × 100 = (800 / 4000) × (1 / 2) × 100 = 4%.

Correct Answer: B — 6%

Q. A sum of $4000 is borrowed for 3 years at a Banker's Discount of 9%. What is the total discount?

A. $1080
B. $720
C. $360
D. $540

Solution

Banker's Discount = 4000 x 9/100 x 3 = $1080.

Correct Answer: A — $1080

Q. A sum of $5000 is borrowed for 2 years at a Banker's Discount of $400. What is the rate of interest?

A. 4%
B. 5%
C. 6%
D. 7%

Solution

Rate = (Banker's Discount / (Principal × Time)) × 100 = (400 / (5000 × 2)) × 100 = 4%.

Correct Answer: B — 5%

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. A sum of $6000 is due in 2 years. If the Banker's Discount is $720, what is the rate of interest?

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

Solution

Rate = (Banker's Discount / (Principal × Time)) × 100 = (720 / (6000 × 2)) × 100 = 6%.

Correct Answer: B — 6%

Q. A sum of $6000 is due in 3 years. If the Banker's Discount is $540, what is the rate of interest?

A. 8%
B. 9%
C. 10%
D. 7%

Solution

Rate = (Banker's Discount / (Principal × Time)) × 100 = (540 / (6000 × 3)) × 100 = 3%.

Correct Answer: B — 9%

Q. A sum of money is due in 2 years. If the banker's discount on it is $200 at 10% per annum, what is the present worth?

A. $1800
B. $2000
C. $2200
D. $2400

Solution

Banker's Discount = Principal × Rate × Time / 100. Let Principal = P. 200 = P × 10 × 2 / 100. P = $2000.

Correct Answer: B — $2000

Q. A sum of money is due in 2 years. If the rate of interest is 10% per annum, what is the Banker's Discount on a sum of $1000?

A. $100
B. $200
C. $150
D. $50

Solution

Banker's Discount = Principal × Rate × Time = 1000 × 10/100 × 2 = $200.

Correct Answer: A — $100

Q. A sum of money is due in 6 years. If the banker's discount is $360 at 12% per annum, what is the present worth?

A. $2400
B. $3000
C. $3200
D. $3600

Solution

Banker's Discount = P × R × T / 100. 360 = P × 12 × 6 / 100. P = $3000.

Correct Answer: B — $3000

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. 12000 is discounted at 8% per annum for 5 months, what is the Banker's Discount?

A. Rs. 200
B. Rs. 400
C. Rs. 300
D. Rs. 500

Solution

Banker's Discount = (12000 * 8 * 5/12) / 100 = Rs. 400

Correct Answer: B — Rs. 400

Q. If a bill of Rs. 15000 is discounted at 8% per annum for 2 months, what is the Banker's Discount?

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

Solution

Banker's Discount = (15000 * 8 * 2/12) / 100 = Rs. 200

Correct Answer: B — Rs. 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 a bill of Rs. 30000 is discounted at 5% for 6 months, what is the Banker's Discount?

A. Rs. 750
B. Rs. 500
C. Rs. 600
D. Rs. 700

Solution

Banker's Discount = (30000 * 5 * 6/12) / 100 = Rs. 750

Correct Answer: A — Rs. 750

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