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The true discount on Rs. 1760 due after a certain time at 12% per annum is Rs. 160. The time after which it is due is:

Correct answer: D. 10 monthsCredit & Lending

  • A. 6 months
  • B. 8 months
  • C. 9 months
  • D. 10 monthsCredit & Lending

Explanation

The present value of the bill is Rs. 1760 - Rs. 160 = Rs. 1600. Thus, for the given time, simple interest is Rs. 160/Rs. 1600 = 0.10, so 0.12 x time = 0.10 and time = 0.10/0.12 = 5/6 year = 10 months. The likely mistake is choosing 9 months by using the discount as a direct percentage of the bill amount instead of its present value.

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Profit and loss compare the cost price and selling price of an item, using profit or loss percentages based on the cost price unless stated otherwise. Questions include marked price, discount, successive discounts, commission, and finding an unknown price, with care needed to distinguish discount from loss.

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