Arithmatical - True Discount
Important facts and Formulae
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 : |
Let rate = R% per annum and Time = T years. Then, |
1. | P.W. = 100 x Amount / 100 + (R x T) = 100 x T.D / R x T |
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2. | T.D = (P.W.) x R x T / 100 = Amount x R x T / 100 + (R x T) |
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3. | Sum = (S.I.) x (T.D.) / (S.I.) - (T.D.) |
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4. | (S.I.) - (T.D.) = S.I. on T.D. |
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5. | When the sum is put at compound interest, then |
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