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 True Discount Questions

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FACTS  AND  FORMULAE  FOR  TRUE  DISCOUNT  QUESTIONS

 

 

Suppose a man has to pay Rs.156 after 4 years and the rate of interest is 14% per annum. Clearly, Rs. 100 at 14% will amount to Rs. 156 in 4 years. So, the payment of Rs. 100 now will clear off the debt of Rs.156 due 4 years. Hence, we say that :

 

Sum due = Rs.156 due 4 years hence;

 

Present Worth (P.W) = Rs. 100;

 

True Discount (T.D) = (Sum due) - (P.W)=Rs. (156 - 100) = Rs. 56

 

We define : 

               T.D = Interest on P.W  

               Amount = (P.W) + (T.D)

Interest is reckoned on P.W and true discount is reckoned on the amount.

 

IMPORTANT FORMULAE

Let rate = R% per annum and Time = T years. Then,

1. P.W=100×Amount100+R×T=100×T.DR×T

 

2. T.D=P.W×R×T100=Amount×R×T100+R×T

 

3.  Sum=S.I×T.DS.I-T.D

 

4. (S.I) - (T.D )= S.I on T.D

5. When the sum is put at compound interest, then 

P.W=Amount1+R100T

Q:

The true discount on a bill due 9 months hence at 12% per annum is Rs. Find the amount of the bill and its present worth.

A) 1500 B) 1600
C) 6200 D) 6000
 
Answer & Explanation Answer: D) 6000

Explanation:

Let amount be Rs. x. 

Then,  [X * R * T] / [100+(R * T)]  

⇒x×12×34100+12×34 = 540 

x=  Rs.6540  

Amount = Rs. 6540.  

P.W. = Rs. (6540 – 540) =Rs. 6000.

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7 6867
Q:

If Rs.20 is the True Discount on Rs260due after a certain time.What wil be true discount on the same sum due after half of the former time, the rate of interest being the same?

A) Rs.9.40 B) Rs.10.14
C) Rs.10.40 D) Rs.9.14
 
Answer & Explanation Answer: C) Rs.10.40

Explanation:

Simple Interest on Rs. (260-20) for a gven time= Rs.20 

Simple Interest on Rs. (260-20) for a half time  = Rs.10 

True Discount on Rs.250 = Rs.10  

True Discount on Rs.260 = Rs.[(10/250) x 260] = Rs. 10.40

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2 5693
Q:

The true discount on a certain sum of money due 3 year hence is Rs.100 and the S.I. on the same sum for the same time and at the same rate is Rs.120. Find the sum and the rate percent.

A) (6 + 2/3)% B) (5+ 2/3)%
C) (2+ 2/3)% D) (4+ 2/3)%
 
Answer & Explanation Answer: A) (6 + 2/3)%

Explanation:

Sum ⇒ Amount 

A = (SI x TD)/(SI - TD)

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3 5559
Q:

The present value of a bill due at the end of 2 years is Rs.1250. If the bill were due at the end of 2 years and 11 months, its present worth would be Rs.1200. Find the rate of interest and the sum.

A) rs.1175 B) rs.1375
C) rs.1475 D) rs.1575
 
Answer & Explanation Answer: B) rs.1375

Explanation:

PW = 100×Amount100+R×T 

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26 5292
Q:

The true discount on a bill due 9 months hence at 12% per annum is Rs 540. Find the amount of the bill and its present worth?

A) 1600 B) 7000
C) 6000 D) 6500
 
Answer & Explanation Answer: C) 6000

Explanation:

Let amount be Rs.x then,  

 [X * R * T] / [100 + (R * T)] = T.D  

=> [x * 12 * (3/4)] / [100+(12 * 3/4)] =540  

=> x = 6540  

Amount = Rs.6540   

P.W = Rs.(6540 -540) = Rs.6000

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0 5285
Q:

The Simple Interest & True Discount on a certain sum of money for a given time & at a given rate are Rs 85 & Rs.80.The sum is:

A) Rs.1350 B) Rs.1360
C) Rs.1316 D) Rs.1200
 
Answer & Explanation Answer: B) Rs.1360

Explanation:

Sum = [(S.I x T.D)/(S.I-T.D)] = (85 x 80)/(85-80) = Rs.1360

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1 4978
Q:

In what time a debt of Rs.7920 due may be cleared by immediate cash down payment of Rs.3600 at 1/2% per month

A) 10years B) 20years
C) 30years D) 40years
 
Answer & Explanation Answer: B) 20years

Explanation:

PW = 100×Amount100+R×T

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6 4848
Q:

What is the true discount on a bill of Rs.2916 due in 3 years hence at 8% C.I.?

A) Rs.600 B) Rs.601
C) Rs.602 D) Rs.603
 
Answer & Explanation Answer: C) Rs.602

Explanation:

PW = Amount1+R100T 

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27 4765