A sum of money is due in 6 years. If the banker's discount is $360 at 12% per an

₹0.0

Question: 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?

Options:

Correct Answer: $3000

Solution:

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

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

Step 1: Understand the problem. We need to find the present worth of a sum of money that is due in 6 years.
Step 2: Know the formula for Banker's Discount: Banker's Discount = Present Worth (P) × Rate (R) × Time (T) / 100.
Step 3: Identify the values given in the problem: Banker's Discount = $360, Rate (R) = 12%, Time (T) = 6 years.
Step 4: Substitute the known values into the formula: 360 = P × 12 × 6 / 100.
Step 5: Simplify the equation: 360 = P × 72 / 100.
Step 6: Multiply both sides by 100 to eliminate the fraction: 36000 = P × 72.
Step 7: Divide both sides by 72 to solve for P: P = 36000 / 72.
Step 8: Calculate the value: P = 500.
Step 9: Therefore, the present worth is $500.

Banker's Discount – The banker's discount is the interest on the face value of a sum due, calculated using the formula: Banker's Discount = P × R × T / 100, where P is the present worth, R is the rate of interest, and T is the time in years.
Present Worth – Present worth refers to the current value of a sum of money that will be received in the future, discounted back to the present using the banker's discount formula.