Aptitude - Banker's Discount - Discussion

Bill due is 4 months and for a year, total number of months is 12. So 4/12 = 1/3.

How T is 1/3? Please tell me.

How can get 105?

I = P*N*R.

Here I = Interest.

P = Capital.
N = Time.
R = Rate.

Let capital=x.

(420-x) = x*(4/12)*(15/100).

x = 400 answer.

Thanks for all who mention the answers here.

I didn't understand TD and BD and BG please anyone explain me?

Following is explanation, and may be a shortcut for few students:

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

Given that, BD = Rs. 420, Time (T) = 4/12 year, Interest Rate (R) = 0.15.

True Discount (TD) is simple interest on Present Worth (PW).

We know, BD = F*T*R/100 = 420.

=> F = BD*100/T*R .
=> F = 420*100*12/(4*15).
=> F = 420*20.

We know, PW = F/{1+(T*R/100)}
=> PW = 420*20*100/105.
=> PW = 4*20*100.

We know, TD = PW*T*R/100.
=> TD = 4*20*100*4*15/(100*12).
=> TD = Rs. 400.

Thanks.

Why we take T=1/3?

This explanation is just for @Lakshmi's confusion,

Very simple, B.D stands for banker discount, a fix amount which is given by bank to its client on its deposit,

Got it @Lakshmi.

Thanks @Kiran for explaining but I have a small doubt you said true discount is equal to simple interest.

But you said again is equal to face value+ simple interest. I didn't understand once explain that.