A bill is discounted at 5 % per annum. If banker’s discount

A bill is discounted at 5 % per annum. If banker’s discount be allowed, at what rate of interest must the proceeds be invested, so that nothing is lost?

Let the sum be $ 100.
Then, B.D. = $ 5 Proceeds = $ (100 - 5) = $ 95
∴ $ 5 must be the interest on $ 95 for 1 year.

So, rate =		100 x 5		= 5	5	%
		95 x 1			19