The banker's discount on a certain sum due 2 years later is 11/10 of the true discount. the rate percent is?
Correct Answer: 5%
Explanation:
Let T.D. be Re. 1. Then, B.D. = Rs. (11/10) = Rs. 1.10
∴ Sum = Rs. 1.10 x 1/(1.10 - 1)
= Rs. 1.10 / 0.10 = Rs.11 So, S.I. on Rs. 11 for 2 years is Rs. 1.10
∴ Rate = (100 x 1.10) / (11 x 2)% = 5%