A bill of Rs. 10000 is discounted at 5% per annum for 1 year. What is the banker
Practice Questions
Q1
A bill of Rs. 10000 is discounted at 5% per annum for 1 year. What is the bankers' discount?
Rs. 500
Rs. 600
Rs. 700
Rs. 800
Questions & Step-by-Step Solutions
A bill of Rs. 10000 is discounted at 5% per annum for 1 year. What is the bankers' discount?
Correct Answer: Rs. 500
Step 1: Identify the total amount of the bill, which is Rs. 10000.
Step 2: Identify the discount rate, which is 5% per annum.
Step 3: Identify the time period for the discount, which is 1 year.
Step 4: Use the formula for Bankers' Discount: Bankers' Discount = (Bill Amount × Discount Rate × Time) / 100.
Step 5: Substitute the values into the formula: Bankers' Discount = (10000 × 5 × 1) / 100.
Step 6: Calculate the result: 10000 × 5 = 50000, then 50000 / 100 = 500.
Step 7: Conclude that the Bankers' Discount is Rs. 500.
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.
