Answer to Question #122027 in Financial Math for Gabriel

Question

bill was drawn on 14th June, 2006 at 8 months after date and was discounted on 24th September, 2006 at 5% per annum. If the banker’s gain on the basis of simple interest is Rs 3, calculate the sum for which the bill was drawn.

Answer 1

A = R_s

i =5/100 =0.05

Bills drawn on 14^th june so legally due date 14^th feb

As bill is discounted on 26^th sep

Remaining period =6 days of sep+31 days of oct + 30 days of nov +31 days of dec +31 days of jan + 16 days of feb

=145days

145/365 = 29/73 year

[3][0.05][49/73] =0.0596

The holder will receive = R_S [3-0.0596]

= 2.9404