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Aptitude True Discount


True Discount is the method of calculation and collection of Interest upfront from the borrower while disbursing the loan at a specific rate of Interest at the same time same rate of interest is considered for calculating interest on interest and transfer the same to customer

IMPORTANT FORMULAE

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
2. T.D. =
(P.W.) x R x T / 100
=
Amount x R x T / 100 + (R x T)
3. Sum =
(S.I.) x (T.D.) / (S.I.) - (T.D.)

4. (S.I.) - (T.D.) = S.I. on T.D.

5. When the sum is put at compound interest, then P.W. =
Amount / 1 +(
R / 100
)T






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