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What rate of interest does a man get for his money when in discounting a bill due in 10 months, he deducts 4 % of the amount of the bill?
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- 5%
- 6%
- 8%
- 4%
- 5%
Correct Option: A
Let the amount of the bill be $ 100.
Money deducted = $ 4
Money received by holder of the bill = $ (100 - 4) = $ 96
S.I. on $ 96 for 10 months = $ 4
| ∴ Rate of interest = | Banker 's discount × 100 | % |
| Amount × Time |
| Rate = | 100 x 4 x 6 | = 5 % |
| 96 x 5 |
