Question

Find the banker's discount of the bill for Rs 300 drawn on May 15 for 3 months and discounted on july 20 at $5$ % per annum.

• A. Rs $1.19$
• B. Rs $2.19$
• C. Rs $1.00$
• D. None of the above

Answer 1

The correct option is A Rs $1.19$

$\Rightarrow$ Face value of the bill = $Rs.300$

$\Rightarrow$ Date on which the bill was drawn = $May15for3months$.

$\Rightarrow$ Nominally due date = $August15$ and Legally due date = $August18$

$\Rightarrow$ Date on which the bill was discounted = $July20$

$\Rightarrow$ Unexpired time (July 20 to August 18) = $11+18=29days=\frac{29}{365}year.$

$\therefore$ $B.D.=S.I.$ on $Rs.300$ for $\frac{29}{365}yearatrate5\%$

$\therefore$ $B.D=\frac{300\times 29\times 5}{365\times 100}=Rs.1.19$