If the Banker's Discount on a sum of $8000 for 5 years at 8% is calculated, what

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Question: If the Banker\'s Discount on a sum of $8000 for 5 years at 8% is calculated, what is the total discount?

Options:

Correct Answer: $3200

Solution:

Banker\'s Discount = 8000 × 8/100 × 5 = $3200.

If the Banker's Discount on a sum of $8000 for 5 years at 8% is calculated, what is the total discount?

If the Banker's Discount on a sum of $8000 for 5 years at 8% is calculated, what is the total discount?

Step 1: Identify the principal amount, which is $8000.
Step 2: Identify the rate of interest, which is 8%.
Step 3: Identify the time period, which is 5 years.
Step 4: Convert the percentage rate to a decimal by dividing by 100. So, 8% becomes 0.08.
Step 5: Calculate the interest for 5 years using the formula: Interest = Principal × Rate × Time.
Step 6: Substitute the values into the formula: Interest = 8000 × 0.08 × 5.
Step 7: Calculate the multiplication: 8000 × 0.08 = 640.
Step 8: Now multiply 640 by 5: 640 × 5 = 3200.
Step 9: The total Banker's Discount is $3200.

Banker's Discount – The Banker's Discount is calculated based on the principal amount, the rate of interest, and the time period, representing the interest that would be earned on the principal if it were invested.