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. =