Aptitude Solved Problems

Bankers Discount
Concept of Bankers Discount :

Suppose a merchant A buys goods worth, say Rs. 15,000 from another merchant B at a credit of say 4
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 4 months. The
date exactly after 4 months is called nominal due date.

Three days (known as grace days) are added to it get a date, known as legal due date.

Suppose B wants to have the money before the legal 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. 15,000 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.

Important Formulae :

B.D. = S.I. on bill for unexpired time.

B.D. = (Amount x Rate x Time) /100

T.D. = (Amount x Rate x Time) /100 + (R x T)

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

T.D. = (B.D. x 100)/(100 + (R x T))

Amount = (B.D. x T.D.) / (B.D. T.D.)

T.D. = P.W. x B.G.

B.G. = (B.D.) (T.D.) = S.I. on T.D. = (T.D.) 2/ P.W.

Solved Problems
1. The banker's gain of a certain sum due 2 years hence at 5% per annum is Rs. 80. The present worth is ?
Answer : Rs. 800
Explanation :
T.D. = (B.G. * 100) / (Rate * Time)
= Rs. (80 x 100) / (5 x 2)
= Rs. 800

2. The present worth of a certain due sometime hence is Rs. 1600 and the true discount is Rs. 160. The
banker's gain is ?
Answer : Rs. 16
Explanation :

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

3. The banker's gain on a sum due 3 years hence at 5% is Rs. 90. The banker's discount is ?
Answer : Rs. 690
Explanation :
T.D. = (B.G. x 100) / (R x T)
= Rs. (90 x 100) / (5 x 3)
= Rs. 600
B.D. = Rs. (600 + 90)
= Rs. 690

4. The banker's discount on a bill due 6 months hence at 6% is Rs. 37.08. The true discount is ?
Answer : Rs. 36
Explanation :
T.D. = (B.D. x 100) / {100 + (R x T)}
= Rs. (37.08 x 100) / {100 + (6 x 1/2)}
= Rs. 36

5. The true discount on a bill of Rs. 1860 due after 8 months is Rs. 60. Find the banker's discount ?
Answer : Rs. 62
Explanation :
Amount = Rs. 1860.
True discount = Rs. 60
Present worth = Rs. 1860 - Rs. 60 = Rs. 1800
S.I. on Rs. 1800 for 8 months = Rs. 60
Rate = [(100 x 60) / (1800 x 2/3)]%
= 5%
Banker's discount = (1860 x 5 x 2/3)/100
= Rs. 62

6. The true discount on a bill of Rs. 1860 due after 8 months is Rs. 60. Find the banker's gain ?
Answer : Rs. 2
Explanation :
P.W. = Rs. 1860 - Rs. 60
= Rs. 1800
B.G. = (T.D.)2/ P.W.
= (60 x 60)/1800
= Rs. 2

7. The banker's discount on a certain sum due 2 years later is 11/10 of the true discount. the rate percent is ?
Answer : 5%
Explanation :
Let T.D. be Re. 1. Then, B.D. = Rs. (11/10) = Rs. 1.10
Sum = Rs. 1.10 x 1/(1.10 - 1)
= Rs. 1.10 / 0.10 = Rs.11
So, S.I. on Rs. 11 for 2 years is Rs. 1.10
Rate = (100 x 1.10) / (11 x 2)%
= 5%

8. The present worth of a certain bill due sometime hence is Rs. 800 and the true discount is Rs. 36. Then
the banker's discount is ?
Answer : Rs. 37.62

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Explanation :
B.G. = (T.D.)2 / P.W.
= Rs. (36 x 36) / 800
= Rs. 1.62
B.D. = (T.D.) + (B.G.)
= Rs. (36 + 1.62)
= Rs. 37.62

9. The true discount on a bill of Rs. 540 is Rs. 90. The banker's discount is ?
Answer : Rs. 108
Explanation :
P.W. = Rs. (540 - 90) = Rs. 450
S.I. on Rs. 450 = Rs. 90
B.D. = S.I. on Rs. 540
= Rs. (90/450) x 540 = Rs. 108

10. The banker's discount and the true discount on a sum of money due 8 months hence are Rs. 52 and Rs.
50, respectively. Find the sum and the rate percent ?
Answer : 6%
Explanation :
Sum = (B.D. x T.D.) / (B.D - T.D.)
= (52 x 50) / 2 = Rs. 1300
Since B.D. is S.I. on sum due, so S.I. on Rs. 1300 for 8 months is Rs. 52 consequently.
Rate = [(100 x 52)] / [1300 x (2/3)] %
= 6%

11. The banker's discount on Rs. 1600 at 6% is the same as the true discount on Rs. 1624 for the same time
and at the same rate. Find the time ?
Answer : 3 months
Explanation :
S.I. on Rs. 1600 is P.W. of Rs. 1624
i.e. Rs. 24 is the S.I. on Rs. 1600 at 6%
Time = (100 x 24) / (1600 x 6)
= 1/4 year
= 3 months

12. What rate percent does a man get for his money when in discounting a bill due 10 months hence he
deducts 4% of the amount of the bill ?
Answer : 5%
Explanation :
Let the amount of bill be Rs. 100
Money deducted = Rs. 4
Money receive by holder of the bill = Rs. (100 - 4) = Rs. 96
S.I. on Rs. 96 for 10 months = Rs. 4
Rate = [(100 x 4 x 6) / (96 x 5)] = 5%

13. The holder of a bill for Rs. 17850 nominally due on 21st May, 1991 received Rs. 357 less than the
amount of the bill by having it discounted at 5%. When was it discounted ?
Answer : 29 Dec. 1990
Explanation :
Clearly S.I. on Rs. 17850 at 5% is Rs. 357.
Time = (100 x 357) / (17850 x 5)
= 2/5
= 146 days

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So, the bill is 146 days prior to 24th May, the legally due date
May, April, March, Feb., Jan.,Dec.,
= 24 + 30 + 31 + 28 + 31 + 2 = 146 days
So, the bill was discounted on 29 Dec. 1990.

14. A banker's paid 5767.50 for a bill of Rs. 5840, drawn on April 4 at 6 months. On what day was the bill
discounted the rate of interest being 7% ?
Answer : 3rd August
Explanation :
B.D. = Rs. (5840 - 5767.20) = Rs. 72.80
Rs. 72.80 is S.I. on Rs. 5840 at 7%
So, Unexpired time = (100 x 72.80) / (7 x 5840) = 13/73 years = 65 days.
Now, date of draw o bill = April, 4 at 6 months.
Nominally due date = October 4.
Legally due date = October 7
So, we must go back 65 days from October 7.
Oct., sept., Aug. = 7 + 30 + 28
i.e., The bill was discounted on 3rd August.

15. The banker's discounted on a sum of money for 1 1/2 years is Rs. 60 and the true discount on the same
sum for 2 years is Rs. 75. The rate percent is ?
Answer : 3 1/3%
Explanation :
B.D. for 3/2 years = Rs. 60
B.D. for 2 years = Rs. (60 x 2) / (3 x 2) = Rs. 80
Now, B.D. = Rs. 80, T.D. = Rs. 75 and
Time = 2 years.
Sum = Rs. (80 x 75) / 5
= Rs. 1200
Rs. 80 is S.I. Rs. 1200 for 2 years.
So, rate = (100 x 80) / (1200 x 2)%
= 3 1/3%

16. A bill is discounted at 5% per annum. If banker's discount be allowed, at what rate per cent must the
proceeds be invested, so that nothing may be lost ?
Answer : 5 5/19%
Explanation :
Let the sum be Rs. 100. Then, B.D = Rs. 5.
Proceeds = Rs. (100 - 5) = Rs. 95.
Rs. 5 must be the interest on Rs. 95 for 1 year.
So, rate = (100 x 5) / (95 x 1)
= 5 5/19%

17. Find the bankar's discount at a bill of 12750 due four months hence when rate of interest is 6% per
annum ?
Answer : 255
Explanation :
Given That, A = 12750, R = 6%
and T = 4 Months = 4/12 = 1/3 yr , BD = ?
According to the formula,
BD = (A x R x T)/100
= [12750 x 6 x (1/3)] / 100
= (12750 x 2) / 100
= 255

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18. The face value of a bill due 5 yr hence is 13800. If the rate of simple interest is 5% per annum, what
will be the banker's gain at the bill ?
Answer : 690
Explanation :
Give that A = 13800 , R = 5%
T = 5 yr and BG = ?
According to the formula,
BG = [A(R x T)2] / [100(100 + R x T)]
= [13800(5 x 5)2] / [100(100 + 5 x 5)]
= (13800 x 625) / (100 x 125)
= 690

19. The true discount on a bill 24 months, hence at 24% per annum, is 144. What will be the banker's
discount ?
Answer : 213.12
Explanation :
Given that, R = 24%, T = 24 months= 2 yr and TD = 144
BD = TD + BG
According to the formula,
BG = (TD x R x T)/100 = (144 x 24 x 2)/100
= 69.12
BD = 144 + 69.12 = 213.12

20. The true discount at a bill of 7440 due 16 months, hence is 240. Find the banker's gain ?
Answer : 8
Explanation :
Present worth of bill = (7440 - 240) = 7200
Banker's Gain (BG) = (TD)2/PW
= (240 x 240) / 7200
= 576/72
=8

21. The banker's gain of a sum due 8 yr. hence at 24% per annum, is 144. Find the present worth of that
bill ?
Answer : 39.06
Explanation :
Given that BG = 144 , R = 24%
T = 8 yr and PW = ?
According to the formula,
PW = BG x [100/(R x T)]2
= 144 x [100/(24 x 8)]2
= 144 x (100/192) x (100/192)
= 39.06

22. If the banker's discount and banker's gain on a certain bill, are 196 and 28, respectively. Find the
amount of bill.
Answer : 1176
Explanation :
Given that, BD = 196 and BG = 28
TD = BD - BG = 196 - 28 = 168
According to the formula,
A = (BD x TD)/BG = (196 x 168)/28
= 196 X 6
= 1176

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23. The present worth of a bill due sometime, hence is 2200 and true discount on the bill is 220. Find
the banker's discount and banker's gain ?
Answer : 242
Explanation :
Given that, PW = 2200, TD = 220
According to the formula,
BG = (TD)2/PW = (220 x 220)/2200 = 22
BD = (TD + BG) = (220 + 22) = 242

24. The present worth of a sum due sometime hence is 576 And banker's gain is 9. Find the true and
discount?
Answer : 72
Explanation :
Given that PW = 576 , BG = 9 and TD = ?
TD = PW x BG
= 576 x 9
= 24 x 3
= 72

25. If rate of interest and time on a certain bill are numerically equal and true discount is 81 times of
banker's gain, find the rate of interest ?
Answer : 1 1/9 %
Explanation :
Given that, n = 81
According to the formula.
R = 101/n%
= 101/81%
= 10 x (1/9) % = 1 1/9 %

26. The true discount on a certain sum due 1 yr hence at 30% per annum, is 240. What is the banker'
discount on the same sum for the same time and at the same rate ?
Answer : 312
Explanation :
We know that
BG = SI on TD = (240 x 30 x 1 x 1)/100
= 72
BG = BD - TD
BD = BG + TD
= 72 + 240
= 312

27. What rate per cent does Shantanu get for his money in discounting a bill due 30 months hence he
deducts 30% of the amount of the bill ?
Answer : 17 1/7 %
Explanation :
Let the amount of the bill = 100.
Money deducted = 30
Money received by the holder of the bill = (100 - 30) = 70
SI on 70 for 30 months = 30
Rate = [100 x 30] / [70 x (30/12)]% per annum
= (10 x 3 x 12) / 21 %
= (10 x 12) / 7 %
= 120/7 %
= 17 1/7 %

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28. The banker's gain on a certain sum due 2 1/2 years hence is (3/23) of the banker's discount. The rate per
cent is ?
Answer : 6%
Explanation :
Let B.D. be Re. 1. Then B.G. = Re. (3/23)
T.D.= Re. (1 - 3/23) = Re. (20/23)
Sum = Rs. [(1 x 20/23 / (1 - 20/23)] = Rs. 20/3
S.I. on Rs. 20/3 for 2 1/2 years is Re. 1
Rate = (100 x 1 / 20/3 x 5/2)% = 6%

29. The banker's discount on Rs. 1650 due a certain time hence is Rs. 165. Find the true discount and the
banker's gain ?
Answer : Rs. 15
Explanation :
Sum = (B.D. x T.D.) / (B.D. - T.D.) = (B.D. x T.D.) / B.G.
T.D. / B.G. = Sum / B.D.
= 1650/165 = 10/1
i.e., if B.G. is Re. 1,
T.D. = Rs. 10 or B.D. = Rs. 11
if B.D. is Rs. 11, T.D. = Rs. 10
If B.D. is Rs. 165, T.D. = Rs. (10/11) x 165 = Rs. 150
Also, BG = Rs. (165 - 150) = Rs. 15

30. The banker's discount on a sum of money for 1 1/2 years is Rs. 60 and
the true discount on the same sum for 2 years is Rs. 75. The rate per cent is ?
Answer : 3 1/3%
Explanation :
B.D. for (3/2) years = Rs. 60
B.D. for 2 years = Rs. (60 x 2/3 x 2) = Rs. 80
Now, B.D. = Rs. 80; T.D. = Rs. 75
and Time = 2 years
Sum = Rs. (80 x 75 / 5) = Rs. 1200
Rs. 80 is S.I. on Rs. 1200 for 2 years.
So, rate = (100 x 80/1200 x 2)% = 3 1/3%B.D. for (3 / 2) years = Rs. 60
B.D. for 2 years = Rs. (60 x 2 / 3 x 2) = Rs. 80
Now, B.D. = Rs. 80; T.D. = Rs. 75 and Time = 2 years
Sum = Rs. (80 x 75 / 5) = Rs. 1200
Rs. 80 is S.I. on Rs. 1200 for 2 years.
So, rate = (100 x 80 / 1200 x 2)% = 3 1/3%

31. Find the difference between the banker's discount and the true discount on Rs. 8100 for 3 months at
5% ?
Answer : Rs. 1.25
Explanation :
Difference between banker's discount and the true discount = Banker's gain.
B.G. = (B.D.) - (T.D.)
B.D. = FTR / 100
= [8100 x (1/4) x 5] / 100
= 101.25
T.D. = FTR / (100 + TR)
= [8100 x (1/4) x 5] / (100 + 5/4)
= 100
B.G. = 101.25 - 100
= Rs. 1.25

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32. The interest on a certain sum of money is Rs. 67.20 and the discount on the same of money for the same
time and at the same rate is Rs. 60. What is sum ?
Answer : Rs. 560
Explanation :
Interest on Sum - True discount
= Interest on true Discount.
Proof Sum = P.W. + T.D.
Interest on Sum = Interest on P.W. + Interest on T.D.
= T.D. + Interest on T.D.
Interest on Sum - T.D. = Interest on T.D. or Banker's gain = Int. on T.D.
Rs. 67.20 - Rs. 60 = Interest on Rs. 60
Rs. 71/5 = Interest on Rs. 60
Re.1 = Interest on Rs. 60/71/5
Rs. 671/5 = Interest on Rs. 60 / 71/5 x 671/5
The required sum = Rs. 60/71/5 x 671/5 = Rs. 560

33. The banker's gain on a bill due 1 year 4 months hence at 7 1/2% per annum simple interest is Rs. 16.
Find the sum ?
Answer : Rs. 1760
Explanation :
T.D = (16 x 100) / (4/3 x 15/2) = Rs. 160
B.D. = Rs. 160 + Rs. 16 = Rs. 176
Sum = [176 x 100] / [(4/3) x (15/2)]
= Rs. 1760

34. The present worth of a sum due sometime hence is Rs. 576 and the bankers gain is Rs. 16. The true
discount is :
Answer : 96
Explanation :
TD = PWBG
= 57616
= 96

35. The banker's discount on Rs. 1600 at 15% per annum is the same as true discount on Rs. 1680 for the
same time and at the same rate. The time is :
Answer : 4 months
Explanation :
S.I. on Rs. 1600 = T.D. on Rs. 1680.
Rs. 1600 is the P.W. of Rs. 1680,
i.e., Rs. 80 is on Rs. 1600 at 15%.
Time =100 x 80/1600 x 15year
= 1/3year = 4 months

36. The bankers gain on a sum due 6 years hence at 12% per annum is Rs. 540. What is the bankers
discount?
Answer : 1290
Explanation :
TD = BG 100/TR
TD = 5400 100/6 12
TD = 90 100/ 12
TD = 15 100/2
TD = Rs. 750
BG = BD TD
540 = BD 750

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 BD = 540 + 750
= 1290

37. The banker's discount on a certain sum due 2 years hence is 1.1 of the true discount. The rate percent is :
Answer : 5%
Explanation :
Let T.D. be Rs. 1.
Then B.D = Rs. 1.10.
Sum = Rs.1.10 x 1/1.10 1
= Rs.110/10 = Rs. 11
S.I. on Rs. 11 for 2 years is Rs. 1.10
Rate = 100 x 1.10/11 x 2% = 5%

38. A bill is discounted at 10% per annum. If bankers discount is allowed, at what rate percent should the
proceeds be invested so that nothing will be lost?
Answer : 100/9
Explanation :
Let the amount = Rs.100
Then BD = Rs.10 ( banker's discount, BD is the simple Interest on the face value of the bill for unexpired
time and bill is discounted at 10% per annum)
Proceeds = Rs.100 Rs.10 = Rs.90
Hence we should get Rs. 10 as the interest of Rs. 90 for 1 year so that nothing will be lost
10 = 90 1 R/100
R = 10 100/90
R = 100/9

39. The banker's gain on a certain sum due 1(1/2) years hence is 3/25 of the banker's discount.The rate
percent is :
Answer : 9 1/9%
Explanation :

40. The banker's discount on a certain sum due 2 years hence is 11/10 of the true discount.The rate percent
is :
Answer : 5%
Explanation :

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41. The banker's discount on a sum of money for 1(1/2) years is Rs. 558 and the true discount on the same
sum for 2 years is Rs. 600. The rate percent is :
Answer : 12%
Explanation :

42. A bill for Rs. 6000 is drawn on July 14 at 5 months. It is discounted on 5th October at 10%. Find the
banker's gain.
Answer : Rs. 2.36
Explanation :
Face value of the bill = Rs. 6000.
Date on which the bill was drawn = July 14 at 5 months.
Nominally due date = December 14.
Legally due date = December 17.
Date on which the bill was discounted = October 5.
Unexpired time : Oct. Nov. Dec.
26 + 30 + 17 = 73 days = 1/ 5Years
B.D. = S.I. on Rs. 6000 for 1/5 year
= Rs. (6000 x 10 x 1/5 x 1/100) = Rs. 120.
T.D. = Rs.[(6000 x 10 x 1/5)/(100 + (10 x 1/5))]
= Rs.(12000/102) = Rs. 117.64.
B.G. = (B.D.) - (T.D.)
= Rs. (120 - 117.64)
= Rs. 2.36.

43. The banker's discount and the true discount on a sum of money due 8 months hence are Rs. 120 and Rs.
110 respectively. Find the rate percent.
Answer : 150/11%
Explanation :
Sum =[( B.D. x T.D.)/(B.D.- T.D.)]
= Rs.[(120x110)/(120-110)]
= Rs. 1320.
Since B.D. is S.I. on sum due, so S.I. on Rs. 1320 for 8 months is Rs. 120.
Rate =[(100 x 120)/( 1320 x 2/3)%
= 150/11%

44. The true discount on a bill of Rs. 2160 is Rs. 360. What is the banker's discount?
Answer : Rs. 432
Explanation :
F = Rs. 2160
TD = Rs. 360
PW = F - TD = 2160 - 360 = Rs. 1800
True Discount is the Simple Interest on the present value for unexpired time
=> Simple Interest on Rs. 1800 for unexpired time = Rs. 360
Banker's Discount is the Simple Interest on the face value of the bill for unexpired time
= Simple Interest on Rs. 2160 for unexpired time
= 360/1800 2160 = 1/5 2160 = Rs. 432

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45. A bill for Rs. 3000 is drawn on 14th July at 5 months. It is discounted on 5th October at 10%. What is
the Banker's Discount?
Answer : Rs.60
Explanation :
F = Rs. 3000
R = 10%
Date on which the bill is drawn = 14th July at 5 months
Nominally Due Date = 14th December
Legally Due Date = 14th December + 3 days = 17th December
Date on which the bill is discounted = 5th October
Unexpired Time
= [6th to 31st of October] + [30 Days in November] + [1st to 17th of December]
= 26 + 30 + 17 = 73 Days
=73/365 year=1/5 year
BD = Simple Interest on the face value of the bill for unexpired time = FTR/100
3000 1/5 10/100 = 301/5 10 = Rs.60

46. If the true discount on a certain sum due 6 months hence at 15% is Rs. 120, what is the banker's
discount on the same sum for the same time and at the same rate?
Answer : Rs. 129
Explanation :
B.G. = S.I. on T.D.
= Rs.(120 x 15 x 1/2 x 1/100)
= Rs. 9.
(B.D.) - (T.D.) = Rs. 9.
B.D. = Rs. (120 + 9) = Rs. 129.

47. The present worth of a bill due sometime hence is Rs. 1100 and the true discount on the bill is Rs. 110.
Find the banker's discount.
Answer : Rs. 121
Explanation :
T.D. = (P.W.x B.G)(1/2)
B.G. =(T.D.)2/ P.W. = Rs.[(110 x 110) / 1100] = Rs. 11.
B.D.= (T.D. + B.G.) = Rs. (110 + 11) = Rs. 121.

48. The present worth of a certain bill due sometime hence is Rs. 1296 and the true discount is Rs. 72.
What is the bankers discount?
Answer : Rs. 76
Explanation :
BG = TD2/PW = 722 /1296
= 72 72/1296=1212/36 = 12/3 = Rs.4
BG = BD - TD
=> 4 = BD - 72
=> BD = 72 + 4 = Rs. 76

49. The banker's discount on Rs. 1650 due a certain time hence is Rs. 165. Find the true discount and the
banker's gain.
Answer : Rs. 15
Explanation :
Sum = [(B.D.x T.D.)/ (B.D.-T.D.)]
= [(B.D.x T.D.)/B.G.]
T.D./B.G. = Sum/ B.D.
=1650/165

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=10
Thus, if B.G. is Re 1, T.D. = Rs. 10.
If B.D.is Rs. 11, T.D.= Rs. 10.
If B.D. is Rs. 165, T.D. = Rs. [(10/11) x 165]
= Rs.150
And, B.G. = Rs. (165 - 150) = Rs. 15

50. The banker's discount of a certain sum of money is Rs. 72 and the true discount on the same sum for the
same time is Rs. 60. The sum due is:
Answer : Rs. 360
Explanation :
Sum = (B.D. x T.D.)/(B.D. - T.D.)
= Rs. (72 x 60) / (72 - 60)
= Rs. (72 x 60) /12
= Rs. 360

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