Question

A bill for rupees $7,650$ was drawn on $8^{th}$ March, $2013$, at $7$ months. It was discounted on ${18}^{th}$ May, $2013$ and the holder of the bill received rupees $7,497$. What is the rate of interest charged by the bank?

Answer 1

Bill was drawn on $8^{th}$ March $2013$ for $7$ months.
Normal due date $=8^{th}$ October $2013$
Legally due date $={11}^{th}$ October $2013$
It was discounted on ${18}^{th}$ May $2013$
$\therefore$ The unexpired period of the bill.
May - $13$ days
June - $30$ days
July - $31$ days
August - $31$ days
September - $30$ days
October - $11$ days
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Total $=$ $146$ days
$=\frac{146}{365}$ yrs
$=\frac{2}{5}$ yrs
Now banker's discount $=(7650-7497)$
$=153$.
As banker's discount $=A\times n\times i$
$153=7650\times \frac{2}{5}\times i$
$\Rightarrow 765=7650\times 2\times i$
$\Rightarrow \frac{1}{20}=i$
$\Rightarrow i=0.05$
Hence the required rate of interest is $5\%$ p.a.