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True Discount Important Formulas - Aptitude Questions and Answers

This document discusses important formulas for calculating true discount. It provides an example where the sum due is Rs. 156 in 4 years with an interest rate of 14% per annum, making the present worth Rs. 100. The true discount is defined as the sum due minus the present worth. It then lists 5 important formulas for calculating present worth, true discount, sum, simple interest, and present worth when the sum is put at compound interest in terms of the rate, time, and these key values.

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Barun Sarangthem
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668 views1 page

True Discount Important Formulas - Aptitude Questions and Answers

This document discusses important formulas for calculating true discount. It provides an example where the sum due is Rs. 156 in 4 years with an interest rate of 14% per annum, making the present worth Rs. 100. The true discount is defined as the sum due minus the present worth. It then lists 5 important formulas for calculating present worth, true discount, sum, simple interest, and present worth when the sum is put at compound interest in terms of the rate, time, and these key values.

Uploaded by

Barun Sarangthem
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

5/9/13

True Discount Important Formulas - Aptitude Questions and Answers

MPORTANT CONCEPTS
Suppose a man has to pay Rs. 156 after 4 years and the rate of interest is 14% per annum. Clearly, Rs.
100 at 14% will amount to R. 156 in 4 years. So, the payment of Rs. now will clear off the debt of Rs.
156 due 4 years hence. We say that:
Sum due = Rs. 156 due 4 years hence;
Present Worth (P.W.) = Rs. 100;
True Discount (T.D.) = Rs. (156 - 100) = Rs. 56 = (Sum due) - (P.W.)
We define: T.D. = Interest on P.W.;

Amount = (P.W.) + (T.D.)

Interest is reckoned on P.W. and true discount is reckoned on the amount.


IMPORTANT FORMULAE
Let rate = R% per annum and Time = T years. Then,
1. P.W. =

2. T.D. =

3. Sum =

100 x Amount
100 + (R x T)
(P.W.) x R x T
100

100 x T.D.
RxT

Amount x R x T
100 + (R x T)

(S.I.) x (T.D.)
(S.I.) - (T.D.)

4. (S.I.) - (T.D.) = S.I. on T.D.


Amount
5. When the sum is put at compound interest, then P.W. =

[Link]/aptitude/true-discount/formulas

1+

100

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