The banker's discount on a certain sum due 4 yr, hence is

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The banker's discount on a certain sum due 4 yr, hence is 11/10 of the true discount. Find the rate per cent per annum.

1. 2.5%
2. 5%
3. 5.5%
4. 1.5%

Correct Option: A

Let TD = N, then BD = 11N/10
Sum = (BD x TD) / (BD - TD) = [(11N/10) x N] / [11N/10 - N]
= [11N²/10] / [N/10] = 11N
SI on ₹ 11N for 4 yr is ₹ 11N/10.
∴ Rate = (100 x 11N/10)/(11N x 4)% per annum
= 2.5% per annum