Trade Discount

(11) A bill of Rs. 4,800 is due in 5 months. If the banker’s discount is Rs. 480, find the rate of interest.

• (a) 6%
• (b) 10%
• (c) 12%
• (d) 15%

Answer

Correct Answer: (b) 10%
Let the rate of interest be R%.
BD = \frac{P \cdot R \cdot T}{100} \rightarrow 480 = \frac{4800 \cdot R \cdot \frac{5}{12}}{100}
Solving for R gives: R = 10%

(12) If the true discount on a bill of Rs. 3,600 due 6 months hence is Rs. 300, find the banker’s discount rate.

• (a) 4%
• (b) 6%
• (c) 8%
• (d) 10%

Answer

Correct Answer: (d) 10%
Let the banker’s discount rate be R%.
BD = \frac{P \cdot R \cdot T}{100} \rightarrow 300 = \frac{3600 \cdot R \cdot \frac{6}{12}}{100}
Solving for R gives: R = 10%

(13) If the banker’s discount on a bill is Rs. 720, and the bill amount is Rs. 9,000, find the time period.

• (a) 8 months
• (b) 9 months
• (c) 10 months
• (d) 12 months

Answer

Correct Answer: (d) 12 months
Let the time period be T months.
BD = \frac{P \cdot R \cdot T}{100} \rightarrow 720 = \frac{9000 \cdot R \cdot T}{100}
Solving for T gives: T = 12 months.

(14) A bill for Rs. 7,200 is due in 3 months. The banker’s discount rate is 8% per annum. Find the banker’s discount and the true discount.

• (a) Banker’s Discount: Rs. 144, True Discount: Rs. 144
• (b) Banker’s Discount: Rs. 160, True Discount: Rs. 160
• (c) Banker’s Discount: Rs. 144, True Discount: Rs. 140
• (d) Banker’s Discount: Rs. 140, True Discount: Rs. 144

Answer

Correct Answer: (c) Banker’s Discount: Rs. 144, True Discount: Rs. 140
BD = \frac{P \cdot R \cdot T}{100} = \frac{7200 \cdot 8 \cdot \frac{3}{12}}{100} = Rs. 144
Since the time period is one-fourth of a year, the true discount is not equal to the banker’s discount.
TD = BD - \left(\frac{R}{2}\right) \cdot BD = 144 - \left(\frac{8}{2}\right) \cdot 144 = Rs. 140

(15) If the banker’s discount on a bill is Rs. 360, and the rate of interest is 6%, find the bill amount and the time period.

• (a) Bill Amount: Rs. 5,000, Time Period: 10 months
• (b) Bill Amount: Rs. 6,000, Time Period: 12 months
• (c) Bill Amount: Rs. 5,500, Time Period: 8 months
• (d) Bill Amount: Rs. 5,200, Time Period: 9 months

Answer

Correct Answer: (b) Bill Amount: Rs. 6,000, Time Period: 12 months
Let the bill amount be Rs. P and the time period be T months.
BD = \frac{P \cdot R \cdot T}{100} \rightarrow 360 = \frac{P \cdot 6 \cdot T}{100}
Solving for P and T gives: P = Rs. 6,000 and T = 12 months.