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Discount method

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Discount method

Posted by Mihir Nimgani 5 years, 2 months ago

CBSE > Class 08 > Mathematics

1 answers

Meghna Thapar 5 years, 2 months ago

The discount method refers to the sale of a bond at a discount to its face value, so that an investor can realize a greater effective interest rate. This approach yields a higher effective interest rate to the lender, since the interest payment is calculated based on a higher amount than was paid to the lender. Remember the formula for finding the discount price of an item. Where S = sale price, r = discount percentage rate and p = original price, the discount formula is: S = p - rp.

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CBSE > Class 08 > Mathematics