Bankers Discount: Master Competitive Exam Concepts

Bankers Discount

Q. If the present worth of a sum is $1200 and the banker's discount is $180 at 9% per annum, what is the time period?

A. 1 year
B. 2 years
C. 3 years
D. 4 years

Solution

Banker's Discount = P × R × T / 100. 180 = 1200 × 9 × T / 100. T = 2 years.

Correct Answer: B — 2 years

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Q. If the principal is $15000 and the bankers discount is $2250, what is the rate of interest?

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

Solution

Rate = (Bankers Discount × 100) / (Principal × Time) = (2250 × 100) / (15000 × 1) = 15%.

Correct Answer: A — 10%

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Q. If the true discount on a bill of Rs. 3000 due in 5 months is Rs. 150, what is the Banker's Discount at 10% per annum?

A. Rs. 200
B. Rs. 150
C. Rs. 250
D. Rs. 300

Solution

Banker's Discount = True Discount * (1 + (Rate * Time)) = 150 * (1 + (10 * 5/12)) = Rs. 200.

Correct Answer: A — Rs. 200

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Q. What is the Banker's Discount on a bill of $2500 due in 9 months at a rate of 8%?

A. $150
B. $120
C. $100
D. $180

Solution

Banker's Discount = (2500 x 8 x 9/12) / 100 = $150

Correct Answer: A — $150

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Q. What is the Banker's Discount on a bill of $500 due in 3 months at a rate of 6% per annum?

A. $7.50
B. $8.00
C. $9.00
D. $10.00

Solution

Banker's Discount = (Principal x Rate x Time) / 100 = (500 x 6 x 3/12) / 100 = $7.50

Correct Answer: A — $7.50

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Q. What is the Banker's Discount on a bill of Rs. 2000 due in 4 months at 15% per annum?

A. Rs. 100
B. Rs. 80
C. Rs. 60
D. Rs. 120

Solution

Banker's Discount = (2000 * 15 * 4/12) / 100 = Rs. 100.

Correct Answer: B — Rs. 80

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Q. What is the banker's discount on a sum of $5000 due in 5 years at 8% per annum?

A. $2000
B. $1500
C. $1000
D. $800

Solution

Banker's Discount = P × R × T / 100 = 5000 × 8 × 5 / 100 = $2000.

Correct Answer: C — $1000

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Q. What is the bankers discount on a sum of $10000 due in 4 years at 5%?

A. $2000
B. $1000
C. $500
D. $400

Solution

Bankers Discount = (10000 × 5 × 4) / 100 = $2000.

Correct Answer: B — $1000

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Q. What is the effective amount received if a bill of Rs. 20000 is discounted at 10% for 3 months?

A. Rs. 19500
B. Rs. 19800
C. Rs. 19750
D. Rs. 19600

Solution

Banker's Discount = (20000 * 10 * 3/12) / 100 = Rs. 500; Effective Amount = 20000 - 500 = Rs. 19500

Correct Answer: B — Rs. 19800

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Q. What is the face value of a bill if the bankers' discount is Rs. 300, the rate is 10% per annum, and the time is 6 months?

A. Rs. 6000
B. Rs. 5000
C. Rs. 4000
D. Rs. 3000

Solution

Face Value = BD / (Rate × Time) = 300 / (0.10 × 0.5) = Rs. 6000.

Correct Answer: A — Rs. 6000

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Q. What is the face value of a bill if the bankers' discount is Rs. 500, the rate is 10% per annum, and the time is 6 months?

A. Rs. 5000
B. Rs. 6000
C. Rs. 7000
D. Rs. 8000

Solution

Face Value = BD / (Rate × Time) = 500 / (10 × 0.5) = Rs. 5000.

Correct Answer: A — Rs. 5000

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Q. What is the maturity value of a bill of $1000 with a Banker's Discount of $20 for 3 months?

A. $980
B. $1000
C. $1020
D. $1040

Solution

Maturity Value = Principal + BD = 1000 + 20 = $1020

Correct Answer: C — $1020

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Q. What is the present value of a bill of Rs. 10000 due in 1 year at a Banker's Discount of Rs. 800?

A. Rs. 9200
B. Rs. 10000
C. Rs. 8000
D. Rs. 8400

Solution

Present Value = Face Value - Banker's Discount = 10000 - 800 = Rs. 9200

Correct Answer: A — Rs. 9200

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Q. What is the present value of a bill of Rs. 10000 due in 1 year with a bankers' discount of Rs. 800?

A. Rs. 9200
B. Rs. 10000
C. Rs. 10800
D. Rs. 8800

Solution

Present Value = Face Value - BD = 10000 - 800 = Rs. 9200.

Correct Answer: A — Rs. 9200

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Q. What is the present value of a bill of Rs. 10000 due in 6 months if the Banker's Discount is Rs. 500?

A. Rs. 9500
B. Rs. 9000
C. Rs. 8500
D. Rs. 8000

Solution

Present Value = Face Value - Banker's Discount = 10000 - 500 = Rs. 9500

Correct Answer: A — Rs. 9500

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Q. What is the present value of a bill of Rs. 25000 due in 4 months with a Banker's Discount of Rs. 500?

A. Rs. 24500
B. Rs. 24000
C. Rs. 25000
D. Rs. 25500

Solution

Present Value = Face Value - Banker's Discount = 25000 - 500 = Rs. 24500

Correct Answer: A — Rs. 24500

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Q. What is the present value of a sum of $20000 due in 3 years at a bankers discount of 9%?

A. $18000
B. $17000
C. $16000
D. $15000

Solution

Bankers Discount = (20000 × 9 × 3) / 100 = $5400. Present Value = 20000 - 5400 = $14600.

Correct Answer: A — $18000

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Q. What is the present worth of a sum of $8000 due in 2 years if the banker's discount is $640 at 8% per annum?

A. $7200
B. $7600
C. $8000
D. $8400

Solution

Banker's Discount = P × R × T / 100. 640 = P × 8 × 2 / 100. P = $7200.

Correct Answer: A — $7200

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Q. What is the true discount on a bill of Rs. 10000 due in 1 year if the Banker's Discount is Rs. 1000?

A. Rs. 900
B. Rs. 1000
C. Rs. 1100
D. Rs. 800

Solution

True Discount = Banker's Discount × (Time / (Time + 1)) = 1000 × (1 / (1 + 1)) = Rs. 500.

Correct Answer: A — Rs. 900

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Q. What is the true discount on a bill of Rs. 30000 due in 2 years if the Banker's Discount is Rs. 3000?

A. Rs. 2500
B. Rs. 3000
C. Rs. 3500
D. Rs. 2000

Solution

True Discount = Banker's Discount × (Time / (Time + 1)) = 3000 × (2 / (2 + 1)) = Rs. 2000.

Correct Answer: A — Rs. 2500

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Q. What is the true discount on a bill of Rs. 5000 due in 3 months if the Banker's Discount is Rs. 125?

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

Solution

True Discount = Banker's Discount * (Time / (Time + 1)) = 125 * (3/12) = Rs. 31.25.

Correct Answer: A — Rs. 100

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Bankers Discount

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