Question: If the Banker\'s Discount on a sum of $3000 for 5 years at 8% is $1200, what is the actual amount received?
Options:
$1800
$2400
$3000
$1200
Correct Answer: $2400
Solution:
Actual Amount = Principal - Banker\'s Discount = 3000 - 1200 = $1800.
If the Banker's Discount on a sum of $3000 for 5 years at 8% is $1200, what is t
Practice Questions
Q1
If the Banker's Discount on a sum of $3000 for 5 years at 8% is $1200, what is the actual amount received?
$1800
$2400
$3000
$1200
Questions & Step-by-Step Solutions
If the Banker's Discount on a sum of $3000 for 5 years at 8% is $1200, what is the actual amount received?
Step 1: Identify the total amount (Principal) which is $3000.
Step 2: Identify the Banker's Discount which is $1200.
Step 3: Use the formula to find the Actual Amount received: Actual Amount = Principal - Banker's Discount.
Step 4: Substitute the values into the formula: Actual Amount = 3000 - 1200.
Step 5: Calculate the result: 3000 - 1200 = 1800.
Step 6: Conclude that the Actual Amount received is $1800.
Banker's Discount – The Banker's Discount is the interest deducted in advance on a loan or sum of money, calculated based on the principal amount and the interest rate over a specified time period.
Actual Amount Received – The actual amount received by the borrower after the Banker's Discount is deducted from the principal.
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