Question

A bill was drawn on 14^th April for ₹ 7,000 and was discounted on 6^th July at 5% p.a. The Banker paid ₹ 6,930 for the bill. Find the period of the bill.

Answer 1

Face value (F.V.) = 7,000

Cash value (C.V.) = 6,930

Banker’s discount (B.D.) = F.V. – C.V.

= 7,000 – 6,930

= 70

Date of drawing bill = 14th April

Date of discounting bill = 6th July

We know that,

Banker’s discount =`("F.V." xx "n"/365 xx "r")/100`

∴ `70 = (7,000 xx "n"/365 xx 5)/100`

∴ n = `(70 xx 100 xx 365)/(7000 xx 5)`

∴ n = 73

To calculate period of bill, we have to calculate 73 days from date of bill discounting.

July	August	September	Total
25	31	17	73 days

∴ Legal due date = 17^th September

∴ Nominal due date = 17 – 3 = 14^th September

Date of drawing bill = 14^th April. 

∴ Period of bill from drawing date is of 5 months.