Discussion
A bill for ₹3,000 due 6 months hence is discounted at 8% per annum. What is the banker’s discount?
Answer: C
Correct answer: ₹120
The banker’s discount is simple interest on the face value for the unexpired period: \[ \text{BD} = \frac{3000 \times 8 \times \tfrac{1}{2}}{100} = \frac{12000}{100} = 120. \] The banker hands over \( 3000 - 120 = 2880 \), which is the discounted value of the bill, and collects the full 3,000 at maturity. The mathematically fair charge would be the true discount, \[ \text{TD} = \frac{3000 \times 4}{104} \approx 115.38, \] which is the second option - and the difference of about 4.62 is the banker’s gain, the banker’s profit on the transaction. That gap is the whole point of the topic: a banker charges interest on the amount that will be received rather than on the amount actually advanced, and so always gains a little.
Post your comment
Please log in or register to post a comment.
Examination Categories
- SSC Exams
- Banking Exams
- Teaching Exams
- Civil Services Exams
- Railways Exams
- Engineering Recruitment Exams
- Defence Exams
- State Government Exams
- Police Exams
- Insurance Exams
- Nursing Exams
- Other Government Exams
- NRA CET
- PG Entrance Exams
- Campus Placement
- MBA Entrance Exams
- CUET and UG Entrance
- Judiciary Exams
- Regulatory Body Exams
- Software Development