# Aptitude - Banker's Discount - Discussion

Discussion Forum : Banker's Discount - General Questions (Q.No. 13)

13.

The banker's discount on a certain sum due 2 years hence is | 11 | of the true discount. |

10 |

The rate percent is:

Answer: Option

Explanation:

Let T.D. be Re. 1.

Then, B.D. = Rs. | 11 | = Rs. 1.10. |

10 |

Sum = Rs. | 1.10 x 1 | = Rs. | 110 | = Rs. 11. | ||||

1.10 - 1 | 10 |

S.I. on Rs. 11 for 2 years is Rs. 1.10

Rate = | 100 x 1.10 | % | = 5%. | |

11 x 2 |

Discussion:

7 comments Page 1 of 1.
Jamshaid said:
1 year ago

The Correct Answer is;

BD/TD = 11/10

Let denote, rate by X% & sum by S, then,

S * X% / (S-TD) * X% = 11/10,

S / (S-TD) = 11/10.

10S = 11S - 11TD.

11TD = S.

TD = S/11, if S = 100, TD = 9.0909 for 2 years.

For 1 year TD = 4.5454.

BD/TD = 11/10

Let denote, rate by X% & sum by S, then,

S * X% / (S-TD) * X% = 11/10,

S / (S-TD) = 11/10.

10S = 11S - 11TD.

11TD = S.

TD = S/11, if S = 100, TD = 9.0909 for 2 years.

For 1 year TD = 4.5454.

Fonzi said:
3 years ago

T.D.=1 (True Discount)

B.D.=11/10 (Banker's Discount)

B.G.=11/10-1=1/10 (Banker's Gain)

T=2 (Time in Years)

T.D.=(B.G. * 100)/(R * T).

Thus, R=5 (Rate in Percent).

B.D.=11/10 (Banker's Discount)

B.G.=11/10-1=1/10 (Banker's Gain)

T=2 (Time in Years)

T.D.=(B.G. * 100)/(R * T).

Thus, R=5 (Rate in Percent).

AMIT NATH said:
7 years ago

What is B.D and T.D?

SUKUMAR SATYEN said:
8 years ago

Following is explanation:

Rate of Interest is to be found out !

Given that, T = 2 years.

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

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

=> BD = F*R*2/100....equation (1).

Also Given that,

BD = (11/10)*TD....equation (2).

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

=> TD = PW*T*R/100.

=> TD = PW*2*R//100....equation (3).

From equation (1), (2) & (3),

=> F*R*2/100 = (11/10)*(PW*2*R/100).

=> F = (11/10)*PW.

=> F*(10/11) = PW....equation (4).

We know, PW = F/{1+(T*R/100)}....equation (5).

From equation (4) & (5),

=> F *(10/11) = F/{1+(2*R/100)}.

=> (11/10) = {1+(R/50)}. Denominators changed !

=> (11/10)-1 = R/50.

=> 1/10 = R/50.

=> R = 50/10 = 5 percent.

Thanks.

Rate of Interest is to be found out !

Given that, T = 2 years.

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

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

=> BD = F*R*2/100....equation (1).

Also Given that,

BD = (11/10)*TD....equation (2).

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

=> TD = PW*T*R/100.

=> TD = PW*2*R//100....equation (3).

From equation (1), (2) & (3),

=> F*R*2/100 = (11/10)*(PW*2*R/100).

=> F = (11/10)*PW.

=> F*(10/11) = PW....equation (4).

We know, PW = F/{1+(T*R/100)}....equation (5).

From equation (4) & (5),

=> F *(10/11) = F/{1+(2*R/100)}.

=> (11/10) = {1+(R/50)}. Denominators changed !

=> (11/10)-1 = R/50.

=> 1/10 = R/50.

=> R = 50/10 = 5 percent.

Thanks.

Ruchi said:
1 decade ago

T.D = True discount.

B.D = Banker's discount.

T.D = (B.D*100)/(100+R*T). Where R= rate, T=time.

Now, 10/11BD = BD*100 /(100+2T).

100+2R = 110.

2R = 10.

R = 5.

B.D = Banker's discount.

T.D = (B.D*100)/(100+R*T). Where R= rate, T=time.

Now, 10/11BD = BD*100 /(100+2T).

100+2R = 110.

2R = 10.

R = 5.

Santu said:
1 decade ago

Can anyone tell me what is T.D and B.D ?

Puli said:
1 decade ago

How we take T.D value as 1?

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