Questions On Bill Of Exchange

FINANCIAL MATHEMATICS

QUESTIONS ON BILLS OF EXCHANGE

1

A Bill of Exchange for $4,000 was drawn on 1 January 1980 for six months and discounted on 5 February 1980. Calculate the Banker’s Discount at 12% per annum

2

(a)    What is the Banker’s Discount on a Bill Of Exchange for $4,000 for four months drawn on 1 July and discounted by the bank on 23 August at 10% per annum

(b)    What is its Present Value?

3

An exporter draws a Bill of Exchange on his overseas customer on 1 July for $10,000 for three months. He discounts the Bill with his bankers on 23 July at 8% per annum

(a)    how much does the exporter receive for the discounted Bill?

(b)    If the sum received from the bank had been $40 more, what would have been the rate of discount ( allow three days of grace)

4

Find the discountable value of the bill for $438 drawn on 5 th April at 6 months and discounted on the 14 th June at 6%

5

How much Mr A receive for a bill of $584, drawn on the 3 rd October at 3 months and discounted on the 1 st November at 8% ?

6

Mr A received $442.80 for a bill of $450 which had 146 days to run. Find the rate of discount.

7

Find the true discount of a bill of $500 for 3 months, discounted at 7 ½ % per annum, 30 days before it is due.

8

Find the difference between the true discount and the banker’s discount on a 90-day bill for $800, drawn on the 8 th March and discounted on the 28 th March at 7%