Aptitude - Banker's Discount - Discussion

Discussion :: Banker's Discount - General Questions (Q.No.7)

7. 

The certain worth of a certain sum due sometime hence is Rs. 1600 and the true discount is Rs. 160. The banker's gain is:

[A]. Rs. 20
[B]. Rs. 24
[C]. Rs. 16
[D]. Rs. 12

Answer: Option C

Explanation:

B.G. = (T.D.)2 = Rs. 160 x 160 = Rs. 16.
P.W. 1600


Isha said: (Aug 20, 2011)  
Why its T. D square?

Aishwarya said: (Oct 27, 2011)  
Why its T.D square?

Jai Prakash said: (Apr 15, 2013)  
Actual formula is T.D = sqrt(P.W*B.G).

By squaring on both sides it is (T.D)^2 = P.W*B.G (To remove square root, we are squaring on both sides).

Now B.G= (T.D)^2/P.W.

Lazycd said: (Sep 12, 2014)  
Can Someone explain the question please?

Mohan said: (Nov 21, 2014)  
P.W means?

Vidhya said: (Jan 2, 2015)  
PW means Present Worth.

Sukumar Satyen said: (Apr 30, 2015)  
Following is explanation:

Face Value of Bill (F) is to be found out.

Given that,

Present Worth (PW) = Rs. 1600.

True Discount (TD) = Rs. 160 which is simple interest on Present Worth (PW).

=> TD = PW*T*R/100.
=> 160 = 1600*T*R/100.
=> 160*100/1600 = T*R......equation (1).

We know, PW = F/[1+(T*R/100)].

=> PW*[1+(T*R/100)] = F.
=> 1600*[1+{(160*100/1600)*(1/100)}] = F.
=> 1600*[1+{1/10}] = F.

=> F = 1600*11/10........equation (2).

Banker's Discount is simple interest on Face Value of Bill (F).

=> BD = F*T*R/100.

Using Equation (1) & (2),

=> BD = (1600*11/10)*(160*100/1600)*(1/100).

=> BD = (1600*11*160*100)/(10*1600*100).

=> BD = 16*11 = Rs. 176.

We know, Banker's Gain (BG) is difference between Banker's Discount(BD) and True Discount(TD).

=> BG = BD - TD.
=> BG = 176 - 160 = Rs. 16.

Thanks.

Delhi said: (May 28, 2019)  
Why do we consider the bankers gain is the difference b/w bankers discount and the true discount? Please explain.

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