The Banker’s discount on a sum of money for 18 months is Rs. 600 and the true discount on the same sum…
The correct choice is: “20%” Banker’s discount (BD) is simple interest on the face value, so it grows in proportion to time: BD for 3 years = 600 × (36/18) = ₹1,200. For the…
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The Banker’s discount on a sum of money for 18 months is Rs. 600 and the true discount on the same sum for 3 years is Rs. 750/-. The rate percentage is:
Answer and explanation
Correct answer B
The correct choice is: “20%”
Banker’s discount (BD) is simple interest on the face value, so it grows in proportion to time: BD for 3 years = 600 × (36/18) = ₹1,200.
For the same sum, rate and time (3 years), BD − TD = Banker’s gain = simple interest on the true discount. So ₹1,200 − ₹750 = ₹450 is the interest on ₹750 for 3 years.
450 = 750 × R × 3/100, so R = 45000/2250 = 20%.
Check: the sum is TD × BD/(BD − TD) = 750 × 1200/450 = ₹2,000; interest on ₹2,000 at 20% for 1½ years = ₹600, as given.
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