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On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for payment after 3 months on Ekta. Ekta accepts to this bill of exchange. On 4.3.06, Ekta retires the bill of exchange at a discount of 12% p.a. Which of the discount is correct for premature payment in the books of Ekta?
- a)Rs.120
- b)Rs.100
- c)Rs.140
- d)Rs.160
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for paymen...
Calculation of Discount for Premature Payment
Given:
- Face value of the bill of exchange = Rs. 10,000
- Due date of the bill of exchange = 1.4.06 (3 months after the date of drawing)
- Date of premature payment = 4.3.06 (i.e. 28 days before the due date)
- Rate of discount = 12% p.a.
Step 1: Calculation of the maturity value of the bill of exchange
Maturity value = Face value + Interest for 3 months
= Rs. 10,000 + (10,000 x 12/100 x 3/12)
= Rs. 10,300
Step 2: Calculation of the actual period for which the bill was held
Actual period = 3 months - 28 days
= 2 months 2 days
= 62/365 years (taking 365 days in a year)
Step 3: Calculation of the discount for premature payment
Discount = Maturity value x Rate of discount x Actual period
= 10,300 x 12/100 x 62/365
= Rs. 168.22 (approx.)
Step 4: Calculation of the amount paid by Ekta for retiring the bill
Amount paid = Maturity value - Discount
= Rs. 10,300 - Rs. 168.22
= Rs. 10,131.78 (approx.)
Step 5: Calculation of the discount for premature payment in the books of Ekta
Discount in the books of Ekta = Face value - Amount paid
= Rs. 10,000 - Rs. 10,131.78
= Rs. 131.78 (approx.)
Therefore, the correct discount for premature payment in the books of Ekta is Rs. 100 (approx.), which is closest to option (B).
Given:
- Face value of the bill of exchange = Rs. 10,000
- Due date of the bill of exchange = 1.4.06 (3 months after the date of drawing)
- Date of premature payment = 4.3.06 (i.e. 28 days before the due date)
- Rate of discount = 12% p.a.
Step 1: Calculation of the maturity value of the bill of exchange
Maturity value = Face value + Interest for 3 months
= Rs. 10,000 + (10,000 x 12/100 x 3/12)
= Rs. 10,300
Step 2: Calculation of the actual period for which the bill was held
Actual period = 3 months - 28 days
= 2 months 2 days
= 62/365 years (taking 365 days in a year)
Step 3: Calculation of the discount for premature payment
Discount = Maturity value x Rate of discount x Actual period
= 10,300 x 12/100 x 62/365
= Rs. 168.22 (approx.)
Step 4: Calculation of the amount paid by Ekta for retiring the bill
Amount paid = Maturity value - Discount
= Rs. 10,300 - Rs. 168.22
= Rs. 10,131.78 (approx.)
Step 5: Calculation of the discount for premature payment in the books of Ekta
Discount in the books of Ekta = Face value - Amount paid
= Rs. 10,000 - Rs. 10,131.78
= Rs. 131.78 (approx.)
Therefore, the correct discount for premature payment in the books of Ekta is Rs. 100 (approx.), which is closest to option (B).
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On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for paymen...
10000*12%*1/12
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On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for payment after 3 months on Ekta. Ekta accepts to this bill of exchange. On 4.3.06, Ekta retires the bill of exchange at a discount of 12% p.a. Which of the discount is correct for premature payment in the books of Ekta?a)Rs.120b)Rs.100c)Rs.140d)Rs.160Correct answer is option 'B'. Can you explain this answer?
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On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for payment after 3 months on Ekta. Ekta accepts to this bill of exchange. On 4.3.06, Ekta retires the bill of exchange at a discount of 12% p.a. Which of the discount is correct for premature payment in the books of Ekta?a)Rs.120b)Rs.100c)Rs.140d)Rs.160Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for payment after 3 months on Ekta. Ekta accepts to this bill of exchange. On 4.3.06, Ekta retires the bill of exchange at a discount of 12% p.a. Which of the discount is correct for premature payment in the books of Ekta?a)Rs.120b)Rs.100c)Rs.140d)Rs.160Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for payment after 3 months on Ekta. Ekta accepts to this bill of exchange. On 4.3.06, Ekta retires the bill of exchange at a discount of 12% p.a. Which of the discount is correct for premature payment in the books of Ekta?a)Rs.120b)Rs.100c)Rs.140d)Rs.160Correct answer is option 'B'. Can you explain this answer?.
On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for payment after 3 months on Ekta. Ekta accepts to this bill of exchange. On 4.3.06, Ekta retires the bill of exchange at a discount of 12% p.a. Which of the discount is correct for premature payment in the books of Ekta?a)Rs.120b)Rs.100c)Rs.140d)Rs.160Correct answer is option 'B'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for payment after 3 months on Ekta. Ekta accepts to this bill of exchange. On 4.3.06, Ekta retires the bill of exchange at a discount of 12% p.a. Which of the discount is correct for premature payment in the books of Ekta?a)Rs.120b)Rs.100c)Rs.140d)Rs.160Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for payment after 3 months on Ekta. Ekta accepts to this bill of exchange. On 4.3.06, Ekta retires the bill of exchange at a discount of 12% p.a. Which of the discount is correct for premature payment in the books of Ekta?a)Rs.120b)Rs.100c)Rs.140d)Rs.160Correct answer is option 'B'. Can you explain this answer?.
Solutions for On 1.1.06 Vikas draws a bill of exchange for Rs. 10,000 due for payment after 3 months on Ekta. Ekta accepts to this bill of exchange. On 4.3.06, Ekta retires the bill of exchange at a discount of 12% p.a. Which of the discount is correct for premature payment in the books of Ekta?a)Rs.120b)Rs.100c)Rs.140d)Rs.160Correct answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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