Question

12. A banker discounts a bill which has to run
73 days before it is legally due at 5% p.a. The
Banker's gain on this transaction is Rs. 15.
For what sum the bill was drawn and for
what sum the bill was discounted?

Answer 1

The bank uses another formula called banker's discount rather than the true discount. So, in this case, Banker's discount = FV x r x t = 1050 x 0.05 x 1/2 = Rs. 26.25. Thus, this example clearly explains the difference between Banker's discount and the true discount.

Answer 2

Answer:

Ajay draws a bill of exchange for two months for the amount due which Bhushan accepts and ... (Bill discounted with bank @ 12% p.a. for 2 months) ...