A bill for Rs. 5656 is drawn on July, 14 at 5 months. ........... Find the money that the holder of the bill receives.

Question

A bill for Rs. 5656 is drawn on July, 14 at 5 months. It is discounted on October 5th at 5%. Find the money that the holder of the bill receives.

Answer 1

Face value of the bill=F=5656.....................................................................................(i)
Rate of interest =R=5%........................................................................................(ii)

Date on which bill was drawn =14th july @ 5 months
Nominally due date =14th december
Legally due date =17th december

Date on which the bill is discounted =5th October

Time for which the bill ha yet to run = Oct,Nov,dec
=[6th to 31st Oct]+[30days of Nov]+[1st to 17th dec]
=26+30+17
=73 days
=73/365 year
=1/5 year
Unexpired time=T=1/5 year...............................................(iii)

Banker's Discount=BD=Simple interest on the face value of the bill for unexpired time
BD=FTR/100
=[5656*(1/5)*5]/100.............................................[from (i),(ii),(iii)]
=56.56
Therefore amount of bill received=F-BD
=5656-56.56
=5599.44
Ans is Rs 5599.44