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Bankers Discount - Quantitative Aptitude Video Lecture | Logical Reasoning (LR) and Data Interpretation (DI) - CAT

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FAQs on Bankers Discount - Quantitative Aptitude Video Lecture - Logical Reasoning (LR) and Data Interpretation (DI) - CAT

1. What is Bankers Discount in quantitative aptitude?
Ans. Bankers Discount is a concept in quantitative aptitude that is used to calculate the true discount on a bill when the due date is earlier than the maturity date. It takes into account the interest that would have been earned if the bill had been held till maturity.
2. How is Bankers Discount calculated?
Ans. Bankers Discount is calculated using the formula: Bankers Discount = Face Value - Present Value. The Present Value is calculated by subtracting the true discount from the face value of the bill.
3. What is the significance of Bankers Discount in quantitative aptitude exams?
Ans. Bankers Discount is an important topic in quantitative aptitude exams as it tests the candidate's understanding of time value of money and their ability to calculate the true discount on bills. It also helps in evaluating their problem-solving skills in financial calculations.
4. What are some common applications of Bankers Discount in real life?
Ans. Bankers Discount is commonly used in various financial transactions, such as calculating the interest on short-term loans, determining the price of treasury bills, and analyzing investment opportunities. It is also used in discounting commercial papers and calculating the yield on bonds.
5. Can you provide an example to understand Bankers Discount better?
Ans. Sure! Let's say there is a bill with a face value of $10,000 and a true discount of $500. The present value would be $9,500 (calculated by subtracting the true discount from the face value). If the bill is due in 3 months, the Bankers Discount would be the interest that would have been earned on $9,500 for 3 months.
123 videos|146 docs|117 tests

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