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1. The banker's discount on a certain sum due 2 years hence is $\frac{11}{10}$ of the true discount. The rate percent is:

A. 11%

B. 10%

C. 5%

D. 5.5%

Solution:

\begin{aligned} Let T .D . be Re . 1 \\ Then, B .D . = R s . \frac{11}{10} \\ = R s . 1.10 \\ ∴ Sum = R s . (\frac{1.10 \times 1}{1.10 - 1}) \\ = R s . (\frac{110}{10}) \\ = R s . 11 \\ ∴ S .I . on Rs . 11 for 2 years is Rs . 1 .10 \\ ∴ Rate = (\frac{100 \times 1.10}{11 \times 2}) % \\ = 5 % \end{aligned}

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