If the true discount on a sum is $150 and the time is 4 years at 6% per annum, w

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Question: If the true discount on a sum is $150 and the time is 4 years at 6% per annum, what is the sum?

Options:

Correct Answer: $1500

Solution:

Let the sum be x. True Discount = x * Rate * Time / 100. 150 = x * 6 * 4 / 100. Solving gives x = $1500.

If the true discount on a sum is $150 and the time is 4 years at 6% per annum, what is the sum?

If the true discount on a sum is $150 and the time is 4 years at 6% per annum, what is the sum?

True Discount – True discount is the difference between the present value and the future value of a sum of money, calculated based on the interest rate and time period.
Interest Calculation – Understanding how to calculate interest and apply it to find the present value or future value of a sum.
Time Value of Money – The principle that money available now is worth more than the same amount in the future due to its potential earning capacity.