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.

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:

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