Question

Y draws a trade bill of 12000 for 6 months on x After holding the bill for 2.5 months y discount the bill with bank @10% The amount of discount on bill is
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Answer 1

Concept:

Discounting of Bill-

Bill discounting is a business practice in which unpaid invoices from a company that are due for payment at a later date are sold to a financier.

Amount of Discount on the bill is calculated on the amount of bill for the remaining period for which the bill was not held.

Given:

• Amount of Bill = 12000
• Bill Holding period = 2.5 months
• Rate of Interest = 10%

Find:

The amount of Discount

Solution:

Amount of Discount =

Amount of Bill x interest rate x [(Months for   which bill was drawn - Holding period of bill) / 12]

Amount of Discount = 12000 x 10% x [(6-2.5) / 12 ]

Amount of Discount = 350

Hence, we can conclude that , the amount of discount will be RS.350

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