A bill of Rs. 25000 is due in 1 year. If the Banker's Discount is Rs. 2000, what

₹0.0

Question: A bill of Rs. 25000 is due in 1 year. If the Banker\'s Discount is Rs. 2000, what is the rate of interest?

Options:

Correct Answer: 10%

Solution:

Rate = (Banker\'s Discount * 100) / (Face Value * Time) = (2000 * 100) / (25000 * 1) = 8%

A bill of Rs. 25000 is due in 1 year. If the Banker's Discount is Rs. 2000, what is the rate of interest?

A bill of Rs. 25000 is due in 1 year. If the Banker's Discount is Rs. 2000, what is the rate of interest?

Step 1: Identify the given values. The bill amount (Face Value) is Rs. 25000, the Banker's Discount is Rs. 2000, and the time period is 1 year.
Step 2: Use the formula for calculating the rate of interest: Rate = (Banker's Discount * 100) / (Face Value * Time).
Step 3: Substitute the values into the formula: Rate = (2000 * 100) / (25000 * 1).
Step 4: Calculate the denominator: 25000 * 1 = 25000.
Step 5: Calculate the numerator: 2000 * 100 = 200000.
Step 6: Divide the numerator by the denominator: 200000 / 25000 = 8.
Step 7: The result is the rate of interest, which is 8%. Therefore, the rate of interest is 8%.

Banker's Discount – The difference between the face value of a bill and its present value, which is used to calculate the interest rate.
Rate of Interest Calculation – The formula for calculating the rate of interest based on the banker's discount, face value, and time.