A trade bill is drawn by a supplier of goods as follows: Value of goods sold: ₹10,00,000 Number of days of the bill (take 365 days per year): 60 days Rate of discount (to be charged by banker): 12.50% p.a. You are requir

CS Professional · Capital Commodity and Money Market · PYQS · June 2016
A trade bill is drawn by a supplier of goods as follows: Value of goods sold: ₹10,00,000 Number of days of the bill (take 365 days per year): 60 days Rate of discount (to be charged by banker): 12.50% p.a. You are required to calculate (a) Discount on the bill;

Answer & Explanation:

Discount on bill = (face value of the bill * time in years * rate of interest) / 100 = (10,00,000 * 60 * 12.50) / (365 * 100) = ₹20,547.94 Discount on the bill can be stated as the Simple Interest on the face value of the bill for unexpired time.

Topics: Money Market Instruments

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