# 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:

11%
10%
5%
5.5%
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.

How we take T.D value as 1?

Santu said:   10 years ago
Can anyone tell me what is T.D and B.D ?

Ruchi said:   10 years 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.

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.

AMIT NATH said:   7 years ago
What is B.D and T.D?

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).

Jamshaid said:   7 months ago