The banker's gain on a bill due 1 year hence at 12% per annum is Rs. 6. The true discount is
Question
The banker's gain on a bill due 1 year hence at 12% per annum is Rs. 6. The true discount is
Solution
The banker's gain (BG) is the difference between the Simple Interest (SI) and True Discount (TD) for a certain period of time.
Given: Banker's Gain (BG) = Rs. 6 Rate of Interest (R) = 12% per annum Time (T) = 1 year
We know that BG = SI - TD
And SI = (TD * R * T) / (100 - R * T)
Substituting the values of SI and BG in the above equation, we get:
6 = (TD * 12 * 1) / (100 - 12 * 1) - TD
Solving this equation, we get:
TD = Rs. 300
So, the true discount is Rs. 300.
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