If the bankers' discount on a bill is Rs. 400 and the time is 1 year at a rate o

If the bankers' discount on a bill is Rs. 400 and the time is 1 year at a rate of 8% per annum, what is the face value of the bill?

If the bankers' discount on a bill is Rs. 400 and the time is 1 year at a rate of 8% per annum, what is the face value of the bill?

Correct Answer: Rs. 5000

Step 1: Understand that the bankers' discount (BD) is Rs. 400.
Step 2: Know that the time is 1 year.
Step 3: The rate of interest is 8% per annum, which can be written as 0.08 in decimal form.
Step 4: Use the formula to find the face value of the bill: Face Value = BD / (Rate × Time).
Step 5: Substitute the values into the formula: Face Value = 400 / (0.08 × 1).
Step 6: Calculate the denominator: 0.08 × 1 = 0.08.
Step 7: Now divide 400 by 0.08: Face Value = 400 / 0.08.
Step 8: Perform the division: 400 / 0.08 = 5000.
Step 9: Conclude that the face value of the bill is Rs. 5000.

Bankers' Discount – The bankers' discount is the interest on the face value of a bill for the time period until its maturity, calculated at a specified rate.
Face Value Calculation – The face value of a bill can be calculated using the formula: Face Value = BD / (Rate × Time), where BD is the bankers' discount.