A bill of Rs. 12000 is due in 9 months. If the bankers' discount is Rs. 900, wha

A bill of Rs. 12000 is due in 9 months. If the bankers' discount is Rs. 900, what is the rate of interest?

A bill of Rs. 12000 is due in 9 months. If the bankers' discount is Rs. 900, what is the rate of interest?

Correct Answer: 12%

Step 1: Identify the given values. The bill amount (Principal) is Rs. 12000, the bankers' discount (BD) is Rs. 900, and the time (in years) is 9 months.
Step 2: Convert the time from months to years. Since 9 months is equal to 0.75 years (9/12 = 0.75).
Step 3: Use the formula for rate of interest: Rate = (BD × 100) / (Principal × Time).
Step 4: Substitute the values into the formula: Rate = (900 × 100) / (12000 × 0.75).
Step 5: Calculate the denominator: 12000 × 0.75 = 9000.
Step 6: Now calculate the rate: Rate = (900 × 100) / 9000.
Step 7: Simplify the calculation: Rate = 90000 / 9000 = 10.
Step 8: The final step is to express the rate as a percentage: Rate = 10%.

Bankers' Discount – The bankers' discount is the interest on the face value of a bill for the time it has to run until maturity.
Rate of Interest Calculation – The formula for calculating the rate of interest based on bankers' discount, principal, and time.
Time Conversion – Understanding the conversion of time from months to years for interest calculations.