If a bill of Rs. 12000 is discounted at 8% per annum for 5 months, what is the B

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Question: If a bill of Rs. 12000 is discounted at 8% per annum for 5 months, what is the Banker\'s Discount?

Options:

Correct Answer: Rs. 400

Solution:

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

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

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

Step 1: Identify the total amount of the bill, which is Rs. 12000.
Step 2: Identify the rate of discount, which is 8% per annum.
Step 3: Identify the time period for which the discount is calculated, which is 5 months.
Step 4: Convert the time period from months to years. Since there are 12 months in a year, 5 months is equal to 5/12 years.
Step 5: Use the formula for Banker's Discount: Banker's Discount = (Bill Amount * Rate * Time) / 100.
Step 6: Substitute the values into the formula: Banker's Discount = (12000 * 8 * (5/12)) / 100.
Step 7: Calculate the value: First, calculate 8 * (5/12) = 3.33 (approximately).
Step 8: Now multiply: 12000 * 3.33 = 40000.
Step 9: Finally, divide by 100: 40000 / 100 = Rs. 400.
Step 10: Therefore, the Banker's Discount is Rs. 400.

Banker's Discount – The Banker's Discount is the interest on the face value of a bill for the time period until its maturity, calculated using the discount rate.
Time Period Calculation – Understanding how to convert months into years for the calculation of interest.
Percentage Calculation – Applying percentage formulas correctly to find the discount amount.