Quantitative Aptitude

Banker's Discount and True Discount: Practice Questions with Answers

64 practice questions on Banker's Discount and True Discount, with answers; most also have an explanation or a worked solution. Try each one before you open its answer.

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1. Q.51

   The banker's discount on a bill due 1 year hence at 6% per annum is Rs 3,180. Find the amount of the bill.

   1. A Rs 63,600
   2. B Rs 50,000
   3. C Rs 56,180
   4. D Rs 53,000
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   Correct answer: (D) Rs 53,000

   BD is simple interest on the amount, so A = BD × 100/(R × T). Here R × T = 6 × 1 = 6. A = 3,180 × 100/6 = Rs 53,000.

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2. Q.52

   A bill for Rs 20,300 is due 2 years hence. If the rate of interest is 8% per annum, what is the banker's discount?

   1. A Rs 1,624
   2. B Rs 3,248
   3. C Rs 2,800
   4. D Rs 3,696
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   Correct answer: (B) Rs 3,248

   Banker's discount is simple interest on the full amount of the bill. BD = A × R × T/100 = 20,300 × 8 × 2/100 = Rs 3,248.

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3. Q.53

   The banker's discount on a bill due 1 year hence at 15% per annum is Rs 1,518. Find the true discount.

   1. A Rs 1,760
   2. B Rs 198
   3. C Rs 1,716
   4. D Rs 1,320
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   Correct answer: (D) Rs 1,320

   Here R × T = 15 × 1 = 15. Amount A = BD × 100/RT = 1,518 × 100/15 = 10,120. TD = A × RT/(100 + RT) = 10,120 × 15/115 = Rs 1,320.

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4. Q.54

   Find the banker's gain on a bill of Rs 16,380 due 4 months hence at 15% per annum.

   1. A Rs 78
   2. B Rs 39
   3. C Rs 780
   4. D Rs 26
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   Correct answer: (B) Rs 39

   Here R × T = 15 × 4/12 = 5. BD = 16,380 × 5/100 = 819; TD = 16,380 × 5/105 = 780. BG = BD − TD = 819 − 780 = Rs 39.

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5. Q.55

   What is the banker's gain on a sum of Rs 11,600 due 2 years hence, interest being 8% per annum?

   1. A Rs 256
   2. B Rs 512
   3. C Rs 1,600
   4. D Rs 320
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   Correct answer: (A) Rs 256

   Here R × T = 8 × 2 = 16. BD = 11,600 × 16/100 = 1,856; TD = 11,600 × 16/116 = 1,600. BG = BD − TD = 1,856 − 1,600 = Rs 256.

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6. Q.56

   Find the true discount on Rs 5,600 due 2 years hence at 6% per annum.

   1. A Rs 672
   2. B Rs 72
   3. C Rs 600
   4. D Rs 400
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   Correct answer: (C) Rs 600

   Here R × T = 6 × 2 = 12. TD = A × RT/(100 + RT) = 5,600 × 12/112 = Rs 600. (Rs 672 = A × RT/100 would be the banker's discount, not TD.)

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7. Q.57

   A bill for Rs 14,850 is due 8 months hence. If the rate of interest is 12% per annum, what is the banker's discount?

   1. A Rs 1,782
   2. B Rs 1,188
   3. C Rs 1,276
   4. D Rs 1,100
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   Correct answer: (B) Rs 1,188

   Banker's discount is simple interest on the full amount of the bill. BD = A × R × T/100 = 14,850 × 12/100 × 8/12 = Rs 1,188.

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8. Q.58

   A sum of Rs 18,550 is due 9 months hence. What is its present worth if money is worth 8% per annum simple interest?

   1. A Rs 17,437
   2. B Rs 26,250
   3. C Rs 1,050
   4. D Rs 17,500
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   Correct answer: (D) Rs 17,500

   Here R × T = 8 × 9/12 = 6. PW = 100 × A/(100 + RT) = 100 × 18,550/106 = Rs 17,500. (Taking A − A×RT/100 = Rs 17,437 is the banker's-discount trap.)

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9. Q.59

   Find the banker's gain on a bill of Rs 7,000 due 2 years hence at 6% per annum.

   1. A Rs 72
   2. B Rs 750
   3. C Rs 90
   4. D Rs 180
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   Correct answer: (C) Rs 90

   Here R × T = 6 × 2 = 12. BD = 7,000 × 12/100 = 840; TD = 7,000 × 12/112 = 750. BG = BD − TD = 840 − 750 = Rs 90.

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10. Q.60

    Find the banker's discount on a bill of Rs 10,725 due 2 years hence at 16% per annum.

    1. A Rs 2,600
    2. B Rs 3,432
    3. C Rs 4,264
    4. D Rs 1,716
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    Correct answer: (B) Rs 3,432

    Banker's discount is simple interest on the full amount of the bill. BD = A × R × T/100 = 10,725 × 16 × 2/100 = Rs 3,432.

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11. Q.61

    Find the banker's discount on a bill of Rs 1,840 due 3 years hence at 5% per annum.

    1. A Rs 92
    2. B Rs 240
    3. C Rs 276
    4. D Rs 312
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    Correct answer: (C) Rs 276

    Banker's discount is simple interest on the full amount of the bill. BD = A × R × T/100 = 1,840 × 5 × 3/100 = Rs 276.

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12. Q.62

    The banker's discount on a bill due 8 months hence at 9% per annum is Rs 636. Find the amount of the bill.

    1. A Rs 11,236
    2. B Rs 10,000
    3. C Rs 10,600
    4. D Rs 7,950
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    Correct answer: (C) Rs 10,600

    BD is simple interest on the amount, so A = BD × 100/(R × T). Here R × T = 9 × 8/12 = 6. A = 636 × 100/6 = Rs 10,600.

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13. Q.63

    What is the true discount on a bill of Rs 32,700 due 6 months hence, the rate of interest being 18% per annum?

    1. A Rs 243
    2. B Rs 2,700
    3. C Rs 3,375
    4. D Rs 2,943
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    Correct answer: (B) Rs 2,700

    Here R × T = 18 × 6/12 = 9. TD = A × RT/(100 + RT) = 32,700 × 9/109 = Rs 2,700. (Rs 2,943 = A × RT/100 would be the banker's discount, not TD.)

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14. Q.64

    The banker's discount and the true discount on a bill due 3 years hence are Rs 6,858 and Rs 5,400 respectively. Find the rate of interest per annum.

    1. A 6%
    2. B 12%
    3. C 27%
    4. D 9%
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    Correct answer: (D) 9%

    BG = BD − TD = 6,858 − 5,400 = 1,458. BG is simple interest on TD: 1,458 = 5,400 × R × 3/100, so R = 9%.

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