IMPORTANT CONCEPTS
Banker's Discount:
Suppose a merchant A buys goods worth, say Rs. 10,000 from
another merchant B at a credit of say 5 months. Then, B prepares a bill, called
the bill of exchange. A signs this bill and allows B to withdraw the amount
from his bank account after exactly 5 months.
The date exactly after 5 months is called nominally due
date. Three days (known as grace days) are added to it get a date, known as
legally due date.
Suppose B wants to have the money before the legally due
date. Then he can have the money from the banker or a broker, who deducts S.I.
on the face vale (i.e., Rs. 10,000 in this case) for the period from the date
on which the bill was discounted (i.e., paid by the banker) and the legally due
date. This amount is know as Banker's Discount (B.D.).
Thus, B.D. is the S.I. on the face value for the period from
the date on which the bill was discounted and the legally due date.
Banker's Gain (B.G.) = (B.D.) - (T.D.) for the unexpired
time.
Note: When the date of the bill is not given, grace days are
not to be added.
IMPORTANT FORMULA
1. B.D. = S.I. on
bill for unexpired time.
2. B.G. = (B.D.) -
(T.D.) = S.I. on T.D. = (T.D.)2 P.W.
3. T.D. P.W. x B.G.
4. B.D. = Amount x Rate x
Time/100
5. T.D. =Amount x Rate x
Time/ 100 + (Rate x Time)
6. Amount = B.D. x T.D/B.D. - T.D.
7. T.D. = B.G. x 100/Rate x Time
Title :
Bankers Discount Synopsis
Description : IMPORTANT CONCEPTS Banker's Discount: Suppose a merchant A buys goods worth, say Rs. 10,000 from another merchant B at a cred...
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