naveed_786110
New member
- Joined
- May 10, 2015
- Messages
- 26
Find the face value of a bill which was discounted by a bank for Rs. 95,000 five monthsbefore maturity, at a discount rate of 12%?
I tried to solve it in 2 ways but both were incorrect....just check that out....
=95,000(1+12% / 12) ^ 5 and got result 99845.
And then I thought....it should be 95,000 which should be discounted for np=5 and i=1%( 12% /12).
=95,000/(1.01)^5
But when i consult the solution it says,
= 95,000 / (1-5/12 * 12/100) = 100,000
I think I have not understood the question properly....Moreover I am wondered, the formula A=P/(1-rt) is used.....What is this formula?
I tried to solve it in 2 ways but both were incorrect....just check that out....
=95,000(1+12% / 12) ^ 5 and got result 99845.
And then I thought....it should be 95,000 which should be discounted for np=5 and i=1%( 12% /12).
=95,000/(1.01)^5
But when i consult the solution it says,
= 95,000 / (1-5/12 * 12/100) = 100,000
I think I have not understood the question properly....Moreover I am wondered, the formula A=P/(1-rt) is used.....What is this formula?