Banker’s Discount

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Directions: Each of the questions given below is followed by series of options among which you have to choose the best one. You can also review your choices by clicking into answer section.


1. The banker's gain of a certain sum due 2 years hence at 10% per annum is Rs. 24. The present worth is:

A.Rs. 480

B.Rs. 520

C.Rs. 600

D.Rs. 960


Answer

                  Ans: Option C

       Explanation:     

       T.D. =(B.G. x 100)/(Rate x Time)= (Rs.24 x 100)/(Rate x Time)= Rs.120/(10 x 2) 

       P.W. = (100 x T.D.)/(Rate x Time)= (Rs.100 x 120)/(10 x 2)= Rs.600.


2. The B.G. on a certain sum 4 years hence at 5% is Rs. 200. What is the present worth?

 A. Rs. 4500

 B. Rs. 6000

 C. Rs. 5000

 D. Rs. 4000


Answer

                  Ans: Option C

       Explanation:

       No explanation.


3. The present worth of a sum due sometime hence is Rs. 576 and the banker's gain is Rs. 16.The true discount is:

A.Rs. 36

B. Rs. 72

C.Rs. 48

D.Rs. 96


Answer

                  Ans: Option D

       Explanation:

       T.D. = P.W. x B.G. = 576 x 16 = 96.


4. The bankers discount and true discount on a sum of money due 8 months hence are Rs.120 & Rs.110 resp. Find the sum.

A. 1457

B. 1320

C. 1140

D. 1260


Answer

                  Ans: Option B

       Explanation:

      Sum = (B.D * T.D. / (B.D. -(T.D.

      = (120 * 110) / (120 -110)

      = 1320


5. The banker's discount on Rs. 1650 due a certain time hence is Rs. 165. Find the true discount and the banker's gain.

 A. 15

 B. 20

 C. 18

 D. 13


Answer                   Ans: Option A

       Explanation:

       Sum = [(B.D.xT.D.)/ (B.D.-T.D.)]

       = [(B.D.xT.D.)/B.G.]

       T.D./B.G.  = Sum/ B.D.

       =1650/165

       =10

       Thus, if B.G. is Re 1, T.D. = Rs. 10.

       If B.D.is Rs. ll, T.D.=Rs. 10.

      If B.D. is Rs. 165, T.D. = Rs. [(10/11)xl65]

     =Rs.150

      And, B.G. = Rs. (165 – 150) = Rs, 15.


6. The banker’s gain on a certain sum due 1½ years hence is 3/25 of the banker’s discount. The rate percent is :

A. 3 1/3 %

B. 6 1/6 %

C. 9 1/9 %

D. 9 1/6 %


Answer

                  Ans: Option C

       Explanation:

       No explanation


7. If the discount on Rs. 498 at 5% simple interest is Rs.18, when is the sum due?

A. 8 months

B. 11 months

C. 10 months

D. 9 months


Answer

                  Ans: Option D

       Explanation:

       No explanation


8. The true discount on a bill of Rs. 540 is Rs. 90. The banker's discount is:

A.Rs. 60

B.Rs. 108

C.Rs. 110

D.Rs. 112


Answer

                  Ans: Option B

       Explanation:

      P.W. = Rs. (540 – 90) = Rs. 450.

      S.I. on Rs. 450 = Rs. 90.

      S.I. on Rs. 540 = Rs.   90/450 x 540   = Rs. 108.  

      B.D. = Rs. 108.


9. Ten rupees be allowed as true discount on a bill of 110 rupees due at the end of a certain time, then the discount allowed on the same sum due at the end of double the time?

A. 15.54

B. 16.30

C. 18.33

D. 16.50


Answer

                  Ans: Option C

       Explanation:

       No explanation. 


10. A bill for Rs. 6000 is drawn on July 14 at 5 months. It is discounted on 5th October at 10%. Find the banker's discount, true discount, banker's gain and the money that the holder of the bill receives.

 A. 4390

 B. 6580

 C. 5880

 D. 5350


Answer

                  Ans: Option C

       Explanation:

       Face value of the bill = Rs. 6000.

       Date on which the bill was drawn = July 14 at 5 months. Nominally due date =                  December 14.

       Legally due date = December 17.

       Date on which the bill was discounted = October 5.

       Unexpired time  : Oct.               Nov.                Dec.

                                 26  +               30  +              17     = 73 days  =1/ 5Years

 

       B.D. = S.I. on Rs. 6000 for 1/5 year

       = Rs.   (6000 x 10 x1/5 x1/100)= Rs. 120.

      T.D. = Rs.[(6000 x 10 x1/5)/(100+(10*1/5))]

            =Rs.(12000/102)=Rs. 117.64.

      B.G. = (B.D.) – (T.D.) = Rs. (120 – 117.64) = Rs. 2.36.

     Money received by the holder of the bill = Rs. (6000 – 120) = Rs. 5880.


11. The bankers discount on Rs 1800 at 12 % per annum is equal to the true discount on Rs 1872 for the same time at the same rate .Find the time.

A. 4 months

B. 5 months

C. 6 months

D. 3 months


Answer

                  Ans: Option A

       Explanation:

      S.I on Rs 1800 = T.D on Rs 1872

       P.W of Rs 1872 is Rs 1800

       Rs 72 is S.I on Rs 1800 at 12%

       Time = (100  72)/(12  1800)

       = 1/3 years = 4 months


12. The banker's discount of a certain sum of money is Rs. 72 and the true discount on the same sum for the same time is Rs. 60. The sum due is:

A.Rs. 360

B.Rs. 432

C.Rs. 540

D.Rs. 1080


Answer

                  Ans: Option A

       Explanation:

       Sum = B.D. x T.D. = Rs.72 x 60= Rs.72 x 60 = Rs. 360.

        B.D. – T.D.=72- 60=12 


13. The bankers discount and the true discount of a sum at 10% per annum simple interest for the same time are Rs.100 and Rs.80 respectively. What is the sum and the time?

A.  Sum = Rs.400 and Time = 5 years

B.  Sum = Rs.200 and Time = 2.5 years

C. Sum = Rs.400 and Time = 2.5 years

D.  Sum = Rs.200 and Time = 5 years


Answer

                  Ans: Option C

       Explanation:

      No explanation. 


14. A trader owes a merchant 10,028 INR due one year. The trader wants to settle the amount after three months. How much money should he pay, If the rate of interest 12% per year.

A. 8000

B. 9200

C. 7500

D. 8560


Answer

                  Ans: Option B

       Explanation:

      No explanation. 


15. What is the present worth of a bill of Rs.1764 due 2 years hence at 5% compound interest is

A. 1600

B. 1200

C. 1800

D. 1400


Answer

                  Ans: Option A

       Explanation:

       No explanation. 


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