A bill of Rs. 7000 is due in 1 year. If the Banker's Discount is Rs. 700, what i

A bill of Rs. 7000 is due in 1 year. If the Banker's Discount is Rs. 700, what is the rate of interest?

A bill of Rs. 7000 is due in 1 year. If the Banker's Discount is Rs. 700, what is the rate of interest?

Correct Answer: 10%

Step 1: Understand that the total bill amount is Rs. 7000 and it is due in 1 year.
Step 2: Know that the Banker's Discount is Rs. 700.
Step 3: Use the formula for Banker's Discount: Banker's Discount = (Total Amount * Rate * Time) / 100.
Step 4: Substitute the known values into the formula: 700 = (7000 * Rate * 1) / 100.
Step 5: Simplify the equation: 700 = (7000 * Rate) / 100.
Step 6: Multiply both sides by 100 to eliminate the fraction: 70000 = 7000 * Rate.
Step 7: Divide both sides by 7000 to solve for Rate: Rate = 70000 / 7000.
Step 8: Calculate the Rate: Rate = 10%.

Banker's Discount – The Banker's Discount is the difference between the face value of a bill and its present value, calculated using the rate of interest.
Rate of Interest Calculation – The rate of interest can be derived from the formula relating Banker's Discount, face value, and time.