If the true discount on a sum is $100 and the sum is due in 3 years at a rate of

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Question: If the true discount on a sum is $100 and the sum is due in 3 years at a rate of 15% per annum, what is the sum?

Options:

Correct Answer: $1000

Solution:

Let the sum be x. True Discount = x * Rate * Time / 100. 100 = x * 15 * 3 / 100. Solving gives x = $800.

If the true discount on a sum is $100 and the sum is due in 3 years at a rate of 15% per annum, what is the sum?

If the true discount on a sum is $100 and the sum is due in 3 years at a rate of 15% per annum, what is the sum?

True Discount – True discount is the difference between the present value of a sum due in the future and the actual sum due, calculated using the formula: True Discount = Sum * Rate * Time / 100.
Present Value Calculation – Understanding how to calculate the present value of a future sum using the true discount formula.
Interest Rate Application – Applying the correct interest rate and time period in the context of true discount calculations.