A bill for ` 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.
Answer
Answer (as printed):
Explanation
Face value of the bill = ` 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. 1 26 + 30 + 17 = 73 days = year. 5 1 1 1 \ B.D. = S.I. on ` 6000 for year = ` 6000 × 10 × × = ` 120. 5 5 100 866 BANKER’S DISCOUNT 867 1 6000 × 10 × 5 12000 T.D. = ` = ` = ` 117.64. 1 102 100 + 10 × 5 ∴ B.G. = (B.D.) – (T.D.) = ` (120 – 117.64) = ` 2.36. Money received by the holder of the bill = ` (6000 – 120) = ` 5880.
Explanation as extracted from the printed page; notation may be imperfect.