BD is 11/10 of TD after 2 years: find the annual rate: For a certain amount due 2 years hence, the banker’s discount equals 11/10 of the true discount. Find the simple interest rate per annum.
Aptitude
Banker's Discount
Difficulty: Easy
Choose an option
-
A1%
-
B5%
-
C10%
-
D12%
Answer
Correct Answer: 5%
Explanation
Introduction / Context:Use the identity BD/TD = 1 + r * t. The face value cancels; only r * t matters.
Given Data / Assumptions:BD/TD = 11/10; t = 2 years.
Concept / Approach:1 + r * 2 = 11/10 → r = (1/10) / 2 = 1/20 = 5% per annum.
Step-by-Step Solution:
r = 0.05 = 5% p.a.Verification / Alternative check:Plugging back: 1 + r t = 1 + 0.05*2 = 1.10 = 11/10 ✔️.
Why Other Options Are Wrong:1%, 10%, 12% yield BD/TD values not equal to 11/10.
Common Pitfalls:Using TD/BD instead of BD/TD or mixing years and months.
Final Answer:5% per annum