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DISCOUNT
Discount is of two types:
1. True Discount
2. Bankers Discount
True Discount:
The amount deducted from the bill for cash payment is called discount.
We know that Rs.100 invested today amounts to Rs.136 (SI) at the rate of
12% in 3 years.
We use the following terminology
Present Value or Present worth = P.V = Rs.100
Rate R = 12%
Period T = 3 yrs
Amount A = 136
True Discount = T.D = 136 100 = Rs 36
Here we pay Rs.100 and clear off a loan which will be Rs.136 after 3 years.
(Prepayment)
List of Formulae : (S.I = Simple Interest or Amount)
1. P.V

100A
100 RT

2.

T.D

3.

T.D

4.

(P.V).RT
100

ART
100 RT

S.I T.D
S.I T.D

5. S.I on T.D = B.D T.D

In the case of C.I,
6.

P.V.

100

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EXAMPLES:
1. The true discount on a certain sum of money due 3 year hence is Rs.100 and the
S.I. on the same sum for the same time and at the same rate is Rs.120. Find the
sum and the rate percent.
Sum Amount

120 100
S.I T.D
Rs.600
=
20
S.I T.D

Rate =

100 120
2
6 %
600 3
3

2. The true-discount on Rs.2480 due after a certain period at 5% is Rs.80. Find the
due period.
P.V = A (T.D)
= 2480 80 = Rs.2400
On using eq(2),
Time =

100(T.D) 100 80

8 months.
(P.V) R
2400 5

3. Which is a better offer out of (i) a cash payment now of Rs.8100 or (ii) a credit

1
2

of Rs.8250 after 6 months (6 % S.I.)

A = 8250
T=

1
yr
2

R= 6

PV

1
2

100A
Rs.8000
100 RT

Cash payment of Rs.8100 is better by Rs.100.

4. The present value of a bill due at the end of 2 years is Rs.1250. If the bill were
due at the end of 2 years and 11 months, its present worth would be Rs.1200.
Find the rate of interest and the sum.

PV

100A
100 R
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Case (i):

1250

100A
--------- (1)
100 2R

Case (ii):

1200

100A
35 ---------- (2)
100
R
12

(2) (1) gives

1250 100 2R

35
1200
100
R
12

LHS

24

25

R = 5%
Using in equation (1), A = Rs.1375
5. In what time a debt of Rs.7920 due may be cleared by immediate cash down
payment of Rs.3600 at

1
% per month?
2

1
% per month 6% p.a.
2
A = Rs.7920
P.V = 3600
R = 6%
T =?
Using Equation (1)
T = 20 years
6. What is the true discount on a bill of Rs.2916 due in 3 years hence at 8% C.I.?

P.V

A
(1 i ) T

R
100

= Rs. 2314(approx)
T.D = A PV = Rs.602

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Bankers Discount:
The bankers discount (B.D) is the SI on the face value for a period from the
date on which the bill was discounted and the legally due date.
The money paid by the banker to the bill holder is called the discountable
value.
The difference between the bankers discount and the true discount for the
unexpired time is called the Bankers Gain (B.G).
Explanation:
A and B are two traders. A owes Rs.5000 to B and agrees to pay it after 4
months. B prepares a document called Bill of Exchange. A accepts it and orders his
bank to pay Rs.5000 after 4 months with three days of grace period. This date is
called legally due date and on that day B can present the draft for withdrawal of
Rs.5000 and this Rs 5000 is called the Face Value (F.V).
Let 5th May be the legally due date for B. Suppose that B wants money
before 5th May say on 3rd March. In such case, B sells the bill (draft) to the Bank.
Bank accepts it and in order to gain some profit, the Bank charges B with SI on the
face value for unexpired time i.e. from 3 rd March to 8th May. This deduction is known
as Bankers Discount.
Remark:
When the days of the bill are not given, grace days are not to be added.
List of Formulae:
1. B.D = S.I on the bill for the unexpired time.
2. B.G = B.D T.D
3. B.G = S.I on T.D

ART
100

4. B.D

ART
100 RT

5.

T.D

6.

T.D

7.

8.

T.D

(B.G) 100
RT

(B.D)(T.D)
(B.D) (T.D)
(P.V) (B.G)

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EXAMPLES:
1. If the true discount on a certain sum due 6 months hence at 6% is Rs.40, find
the B.D on the same sum for the same time and at the same rate.
B.G = S.I on T.D =

40
1
6 1.20
100 2

B.D T.D = 1.20

B.D = T.D + 1.20 = 40 + 1.20 = Rs.41.20
2. What rate percent does a person get for his money, if he discounts a bill due in 8
months hence on deducting 10% of the amount of the bill?
For Rs.100, deduction is 10.
Money received by the bill holder = Rs.90
Further
SI on Rs.90 for 8 months = 10
Rate =

SI 100 100 10 3 100

2

16 %
PT
90 2
6
3

3. Find the bankers gain on a bill of Rs.6900 due 3 years hence at 5% p.a. S.I.

B.D

sum R T
Rs.1035
100

T.D

sum R T
Rs.900
100 (R T)

BG = B.D T.D = Rs.135

4. The banker's discount on a certain amount due 8 months hence is

3
of the
23

B.D on it for the same time and at the same rate. Find the rate percent.
If B.G = Rs.1 then B.D. =
T.D = B.D B.G = Rs.
Amount =

23
3

20
3

(B.D) (T.D)
460
Rs
(B.D) (T.D)
9

P = 460; T =

23
2
; S.I =
; R =?
3
3
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R=

S.I 100 5
%
P.T
2

5. The present value of a certain bill due some time hence is Rs.1600 and the
discount on the bill is Rs.160. Find the bankers discount.
From equation (8)

B.G

(T.D)2
160 160

Rs.16
P.V
1600

B.D = B.G + T.D

= 16 + 160
= Rs.176

RACES AND GAMES OF SKILL

Race: A contest of speed in running, riding, driving, sailing or rowing is called a
race.
Dead-heat race: If all the persons contesting a race reach the goal at the same
time, then it is called a dead-heat race.
Games: A game of 100 means that the person among the contestants who scores
100 points first. He is called winner.
If A scores 100 points and B scores 80 points, there we use the phrase A
gives B 20 points
Examples:
1. A can run a km in 3 min and 54 sec and B can run the same distance in 4 min
and 20 sec. By what distance can A beat B?
A beats B by 26 sec.
Distance covered by B is 260 sec = 1000 mtrs
Distance covered by B is 26 sec =

1000
26 100 mtrs.
260

A beats B by 100 mtrs.

2. A and B run a km and A wins by 1 min.
A and C run a km and A wins by 375 mtrs.
B and C run a km and B wins by 30 sec
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Find the time taken by B to run a km.

A beats B by 60 sec
B beats C by 30 sec
Hence A beats C by 90 secs. But we are given that A beats C by 375 mtrs. ie. C
covers 375 mtrs in 90 sec.
Hence, Time taken by C to cover 1 km =

90
1000 240 sec
375

Time taken by B to cover 1 km = 240 30 = 210 secs.

3. In a race A has a start of 100 mtrs and sets off 6 min before B, at the rate of 10
km/hr. How soon will B overtake A, if his speed of running is 12 km/hr.
Speed of A =

10
60

Distance run by A is 6 min =

10
6 1000 mtrs.
60

A has a start of 1000 + 100 = 1100 mtrs. In order to over take A, B should gain
1100 mtrs. But B gains 2000 mtrs in 60 min.
The time taken by B to gain 1100 mtrs. =

60
1100 33 min.
2000

4. A can walk 3 km while B walks 5 kms.

C can walk 6 km while A walks 3.5 km
What start can C give B in a 3 km work?
C walks 6 km while A walk 3.5
If A walks 3 km, then C walks =
When if C walks

6
36

km
3.5 3
7

36
km, then B walks 5 km
7

If C walks 3 km, then B walks =

57
35
3
km
36
12

35

1
km i.e.
C should give B a start of 3
of a km.
12
12

5. In a game of billiards, A can give B 10 points in 60 and he can give C 15 in 60.

How many can B give C in a game of 90?
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If A scores 60 points, then B scores 50

If A scores 60 points, then C scores 45
When B scores 50 points, C scores 45. When B scores 90 points
C scores =

45
90 81 points.
50

Thus B can give C 9 points in a game of 90 points.

6. In a game, A can give B 20 points and C 32 points, B can give C 15 points. How
many points make the game?
Let A score x points
Score of B = x 20
If B scores x points, then score of C = x- 15
When B scores (x 20) points,
C scores

(x 15)
(x 20) points.
x

(x 15)(x 20)
x 32
x
x = 100

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