A bill of Rs. 6000 is due in 4 months. What is the Banker's Discount at 15% per

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Question: A bill of Rs. 6000 is due in 4 months. What is the Banker\'s Discount at 15% per annum?

Options:

Correct Answer: Rs. 300

Solution:

Banker\'s Discount = (6000 * 15 * 4/12) / 100 = Rs. 300

A bill of Rs. 6000 is due in 4 months. What is the Banker's Discount at 15% per annum?

A bill of Rs. 6000 is due in 4 months. What is the Banker's Discount at 15% per annum?

Step 1: Identify the total amount of the bill, which is Rs. 6000.
Step 2: Identify the rate of interest, which is 15% per annum.
Step 3: Identify the time period until the bill is due, which is 4 months.
Step 4: Convert the time period from months to years. Since there are 12 months in a year, 4 months is equal to 4/12 years.
Step 5: Calculate the Banker's Discount using the formula: Banker's Discount = (Principal Amount * Rate * Time) / 100.
Step 6: Substitute the values into the formula: Banker's Discount = (6000 * 15 * (4/12)) / 100.
Step 7: Simplify the calculation: First, calculate 4/12 which equals 1/3. Then, multiply 6000 by 15, which equals 90000. Finally, multiply 90000 by 1/3 to get 30000.
Step 8: Divide 30000 by 100 to get the final Banker's Discount, which is Rs. 300.

Banker's Discount – The Banker's Discount is the interest calculated on the face value of a bill for the time period until its maturity.
Time Value of Money – Understanding how interest rates affect the present value of future cash flows.