A bill of Rs. 15000 is due in 3 months. What is the Banker's Discount at the rat

A bill of Rs. 15000 is due in 3 months. What is the Banker's Discount at the rate of 8% per annum?

A bill of Rs. 15000 is due in 3 months. What is the Banker's Discount at the rate of 8% per annum?

Correct Answer: Rs. 300

Step 1: Identify the total amount of the bill, which is Rs. 15000.
Step 2: Determine the time period until the bill is due, which is 3 months.
Step 3: Convert the time period from months to years. Since there are 12 months in a year, 3 months is equal to 3/12 = 0.25 years.
Step 4: Identify the rate of interest, which is 8% per annum.
Step 5: Use the formula for Banker's Discount: Banker's Discount = (Principal Amount × Rate × Time) / 100.
Step 6: Substitute the values into the formula: Banker's Discount = (15000 × 8 × 0.25) / 100.
Step 7: Calculate the Banker's Discount: 15000 × 8 = 120000, then 120000 × 0.25 = 30000, and finally 30000 / 100 = 300.
Step 8: Conclude that the Banker's Discount is Rs. 300.

Banker's Discount – Banker's Discount is the interest calculated on the face value of a bill for the time period until its maturity, used to determine the discount on a bill of exchange.
Time Value of Money – Understanding how interest rates and time affect the value of money, particularly in the context of calculating discounts.