Aptitude - True Discount

The sum due is called the Amount and the money paid now is called the Present Worth (P.W.) of the sum due.

The difference between the amount and the present worth is called the True Discount (T.D.).

T.D. = Interest on P.W.

Important Formulae :

Let rate = R% per annum and Time = T years. Then,

P.W. = (100 x Amount)100 + (R x T) = (100 x T.D.)(R x T)

T.D. = (P.W. x R x T)100 = A x R x T100 + (R x T)

Amount or sum due = (S.I. x T.D.)(S.I. − T.D.)

Amount = (P.W.) + (T.D.)

(S.I.) − (T.D.) = S.I. on T.D.