A bill of Rs. 18000 is due in 4 months. What is the Banker's Discount at the rat

A bill of Rs. 18000 is due in 4 months. What is the Banker's Discount at the rate of 9% per annum?

A bill of Rs. 18000 is due in 4 months. What is the Banker's Discount at the rate of 9% per annum?

Correct Answer: Rs. 540

Step 1: Identify the total amount of the bill, which is Rs. 18000.
Step 2: Identify the time period until the bill is due, which is 4 months.
Step 3: Identify the interest rate, which is 9% per annum.
Step 4: Convert the time period from months to years. Since there are 12 months in a year, 4 months is equal to 4/12 years.
Step 5: Calculate the Banker's Discount using the formula: Banker's Discount = (Principal Amount × Rate × Time) / 100.
Step 6: Substitute the values into the formula: Banker's Discount = (18000 × 9 × (4/12)) / 100.
Step 7: Simplify the calculation: First, calculate (4/12) which equals 1/3.
Step 8: Now calculate: Banker's Discount = (18000 × 9 × (1/3)) / 100.
Step 9: Calculate 18000 × 9 = 162000.
Step 10: Now divide 162000 by 3 to get 54000.
Step 11: Finally, divide 54000 by 100 to get Rs. 540.

Banker's Discount – The Banker's Discount is the interest on the face value of a bill for the time period until its maturity, calculated at a specified rate.
Time Calculation – Understanding how to convert months into years for interest calculations is crucial.
Percentage Calculation – Applying the percentage formula correctly to find the discount amount.