What is the bankers discount on a sum of $10000 due in 4 years at 5%?

What is the bankers discount on a sum of $10000 due in 4 years at 5%?

Correct Answer: $2000

Step 1: Identify the principal amount, which is $10000.
Step 2: Identify the rate of interest, which is 5%.
Step 3: Identify the time period, which is 4 years.
Step 4: Use the formula for Bankers Discount: Bankers Discount = (Principal × Rate × Time) / 100.
Step 5: Substitute the values into the formula: Bankers Discount = (10000 × 5 × 4) / 100.
Step 6: Calculate the multiplication: 10000 × 5 = 50000, then 50000 × 4 = 200000.
Step 7: Divide by 100: 200000 / 100 = 2000.
Step 8: The Bankers Discount is $2000.

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