Question

A bill of exchange for Rs 750.000 was drawn on 3rd April, 2000 payable at 3 months after date. It was discounted on 24th April, 2000 at 5% per annum. What was the discounted value of the bill?

Answer 1

Amount =750000

I=$0.05×{1\over4}=0.0125$ its 3months

Bill is drawn on 3rd April ,so legally due date is 3rd July.

As the bill is discounted on 24th April

The remaining period = 6days of April 31days of may ,30days of june and 3days of july =67days

Dicscounted time in years is $67\over 365$

Bill of exchange discount =

$$750000×0.0125×{67\over365}$$

$$=1720.890411$$

Discounted value =

$$(750000-1720.890411)$$

$$=748279.1096$$