## Discount

• Present Value: The money to be paid before the due date to clear off debt is called present worth.
• True Discount: The difference between the amount due and the present value or worth of the amount is called the true discount. In other words, it is an interest in the present worth.
• Banker’s Discount: It is the simple interest on the face value or amount due for the period from the date on which the bill was discounted till the legally due date or for the unexpired time.

### Aptitude Discount Formulas

Let rate = R% per annum and Time = T years. Then,

• P.W. = 100 x Amount / 100 + (R x T) = 100 x T.D / R x T
• T.D. = (P.W.) x R x T / 100 = Amount x R x T / 100 + (R x T)
• Sum = (S.I.) x (T.D.) / (S.I.) – (T.D.)
• (S.I.) – (T.D.) = S.I. on T.D.
• When the sum is put at compound interest, then P.W. = Amount / (1 + R /100) T

### Discount Aptitude Questions and Answers

1. A trader owes Rs. 10,028 to a merchant one year hence. The trader wants three months into settling the account. If the interest rate is 12 percent per year, how much cash should he be paying?

• A. Rs. 9025.20
• B. Rs. 9200
• C. Rs. 9600
• D. Rs. 9560

2. A man buys a watch in cash for Rs. 1950 and sells it at one year’s credit for Rs. 2200. If the interest rate is 10 percent per year, the man will:

• A. gains Rs. 55
• B. gains Rs. 50
• C. loses Rs. 30
• D. gains Rs. 30

Answer: Option B (gains Rs. 50)

3. The true discount Rs. 1760 discount due at 12 percent per annum after a certain period is Rs. 160. The time it is going to take is:

• A. 6 months
• B. 8 months
• C. 9 months
• D. 10 months

4. A shopkeeper professes to sell all things at a 20 percent discount but increases the selling price of each article by 30%. His gain on each article is

• A. 3%
• B. 4%
• C. 5%
• D. 6%

5. A dealer agreed to mark his goods by 20 percent and then gave a discount of 10 percent. What amount of income or loss will it be?

• A. 8% profit
• B. 8% loss
• C. 4% loss
• D. 4% profit

Answer: Option A (8% profit )

6. If the true discount on the amount due to 2 years is Rs. 168, the amount due is Rs. 14 percent per annum

• A. Rs. 768
• B. Rs. 968
• C. Rs. 1960
• D. Rs. 2400

7. A merchant sold goods at a discount of 10 percent and earned a 20 percent profit. What percentage of profit would it be if no discount were offered?

• A. 32.32 %
• B. 33.33 %
• C. 34. 5 %
• D. 35. 6 %

8. The true discount on a bill that is due for nine months is thus Rs. 189 at 16 percent per annum. The bill amounts to:

• A. Rs. 1386
• B. Rs. 1764
• C. Rs. 1575
• D. Rs. 2268

9. Which of the following will deliver the maximum Rs 6896 discount?

1) 2 successive discounts of 5% and 5%
2) The single discount of 10%
3) 2 successive discounts of 8% and 2%

• A. 3
• B. 2
• C. 1
• D. All will yield the same discount

10. If Rs. 10 is permitted as a true discount on an Rs. 110 bill due at the end of a given period, then the discount permitted on the same amount due at the end of the double is:

• A. Rs. 20
• B. Rs. 21.81
• C. Rs. 22
• D. Rs. 18.33

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