The banker's discount on a certain sum due 2 years later

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The banker's discount on a certain sum due 2 years later is 11/10 of the true discount. the rate percent is ?

1. 11%
2. 10%
3. 5%
4. 5¹/₃

Correct Option: C

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%