A loan of $8000 is taken for 3 years at a Banker's Discount of 15%. What is the

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Question: A loan of $8000 is taken for 3 years at a Banker\'s Discount of 15%. What is the total discount?

Options:

Correct Answer: $2400

Solution:

Banker\'s Discount = 8000 x 15/100 x 3 = $3600.

A loan of $8000 is taken for 3 years at a Banker's Discount of 15%. What is the total discount?

A loan of $8000 is taken for 3 years at a Banker's Discount of 15%. What is the total discount?

Step 1: Identify the loan amount, which is $8000.
Step 2: Identify the Banker's Discount rate, which is 15%.
Step 3: Identify the duration of the loan, which is 3 years.
Step 4: Calculate the total discount using the formula: Total Discount = Loan Amount x Discount Rate x Duration.
Step 5: Substitute the values into the formula: Total Discount = 8000 x 15/100 x 3.
Step 6: Calculate 15% of $8000, which is $1200.
Step 7: Multiply $1200 by 3 years to get the total discount: $1200 x 3 = $3600.

Banker's Discount – The Banker's Discount is calculated based on the nominal value of the loan and the interest rate over the period, rather than the actual amount of money that will be paid back.
Loan Calculation – Understanding how to calculate the total discount on a loan using the formula for Banker's Discount.