### What Is True Discount And Banking Discount?

Any money that is to be paid before the due date is cleared off for debt is known as the present worth of the money. True discount can be understood in reference to this present worth. The difference between the present worth of the money and the amount is known as the true discount.

### Which Formula Used To Calculate Bankers Discount?

The bank uses another formula called banker's discount rather than the true discount. So, in this case, Banker's discount = FV x r x t = 1050 x 0.05 x 1/2 = Rs. 26.25.