Question

10. a) Find the difference between the banker's discount and true discount
on a bill of Rs. 3500 due in 219 days at 5% p.a.

Answer 1

Answer:

True Discount: The difference between the amount due and the present value or worth of the amount is called the true discount. ... Banker's Discount: It is the simple interest on the face value or amount due for the period from the date on which the bill was discounted till the legally due date or for the unexpired time.

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

540 = Rs. ( 90 /450)x 540 = Rs. 108. B.D.