True Discount Questions

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:

If the truediscount on a sum due 2yrs hence at 14% per annum be Rs168. The sum due is?

A) 700 B) 760
C) 768 D) 786
 
Answer & Explanation Answer: C) 768

Explanation:

P.W = (100 x T.D)/(R x T)  = (100 x 168)/(14 x 2)= 600 

Sum = (P.W + T.D) = Rs. (600+ 168) = Rs.768.

Report Error

View Answer Report Error Discuss

Filed Under: True Discount

0 2512
Q:

A trader owes a maerchant Rs10028 due 1yr hence The trader wants to settle the account after 3 months .If the rate of interest is 12%per annum How much cash should he pay?

A) Rs.9000 B) Rs.9002
C) Rs.9200 D) Rs.9120
 
Answer & Explanation Answer: C) Rs.9200

Explanation:

Required Money = P.W of Rs. 10028 due 9 months hence  

= Rs.[10028 x 100] / [100+(12 x 9/12)] =Rs.9200

Report Error

View Answer Report Error Discuss

Filed Under: True Discount

0 2357
Q:

If the true discount on sum due 2 years hence at 14% per annum be Rs. 168, the sum due is

A) Rs. 600 B) Rs. 768
C) Rs. 878 D) Rs. 668
 
Answer & Explanation Answer: B) Rs. 768

Explanation:

We know that,

P.W = 100×T.D/R×T

= 100×168/14×2

P.W = 600.

 

Now, required Sum = (P.W. + T.D.)

= Rs. (600 + 168)

= Rs. 768.

Report Error

View Answer Report Error Discuss

Filed Under: True Discount
Exam Prep: AIEEE , Bank Exams , CAT , GATE
Job Role: Analyst , Bank Clerk , Bank PO

7 1865