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 (B.G.) is the difference between the Simple Interest (S.I.) and True Discount (T.D.) for a given time and at a given rate.
Given that the Banker's Gain is Rs. 6 and the rate is 12% per annum, we can use the formula:
B.G. = (S.I. - T.D.) = (T.D. * B.G.) / (T.D. + B.G.)
Substituting the given values into the formula:
6 = (T.D. * 6) / (T.D. + 6)
Solving this equation for T.D. (True Discount), we get:
T.D. = Rs. 50
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