If a bill of Rs. 20000 is discounted at 15% per annum for 4 months, what is the

If a bill of Rs. 20000 is discounted at 15% per annum for 4 months, what is the bankers' discount?

If a bill of Rs. 20000 is discounted at 15% per annum for 4 months, what is the bankers' discount?

Correct Answer: Rs. 1000

Step 1: Identify the total amount of the bill, which is Rs. 20000.
Step 2: Identify the rate of discount, which is 15% per annum.
Step 3: Determine the time period for which the bill is discounted, which is 4 months.
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 = 1/3 years.
Step 5: Use the formula for Bankers' Discount: Bankers' Discount = (Bill Amount × Rate × Time) / 100.
Step 6: Substitute the values into the formula: Bankers' Discount = (20000 × 15 × 1/3) / 100.
Step 7: Calculate the value: First, calculate 20000 × 15 = 300000. Then, calculate 300000 × 1/3 = 100000. Finally, divide by 100 to get 1000.
Step 8: The Bankers' Discount is Rs. 1000.

Bankers' Discount – The bankers' discount is the interest calculated on the face value of a bill for the time period until its maturity, using the discount rate.
Time Calculation – Understanding how to convert months into years for the purpose of calculating interest.
Percentage Calculation – Applying percentage formulas correctly to find the discount amount.