A bill of Rs. 25000 is due in 1 year. Calculate the Banker's Discount at the rat

A bill of Rs. 25000 is due in 1 year. Calculate the Banker's Discount at the rate of 5% per annum.

A bill of Rs. 25000 is due in 1 year. Calculate the Banker's Discount at the rate of 5% per annum.

Correct Answer: Rs. 1250

Step 1: Identify the total amount of the bill, which is Rs. 25000.
Step 2: Identify the rate of interest, which is 5% per annum.
Step 3: Identify the time period for which the bill is due, which is 1 year.
Step 4: Use the formula for Banker's Discount: Banker's Discount = (Amount × Rate × Time) / 100.
Step 5: Substitute the values into the formula: Banker's Discount = (25000 × 5 × 1) / 100.
Step 6: Calculate the result: 25000 × 5 = 125000, then 125000 / 100 = 1250.
Step 7: The Banker's Discount is Rs. 1250.

Banker's Discount – Banker's Discount is the interest calculated on the face value of a bill for the time period until its maturity.
Simple Interest Calculation – The formula for calculating simple interest is I = P × R × T, where I is the interest, P is the principal amount, R is the rate of interest, and T is the time in years.