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A bill is discounted at 10 % per annum. If banker’s discount is allowed, at what rate % should the proceeds be invested so that nothing will be lost?
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- 10 %
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11 1 % 9 - 11 %
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9 1 % 9
Correct Option: B
Let the amount = Rs. 100 Then BD = Rs. 10 ( ∵ banker’s discount, BD is the simple Interest on the face value of the bill for unexpired time and bill, in this case, is discounted at 10% per annum)
Proceeds = Rs. 100 − Rs. 10 = Rs. 90
Hence we should get Rs. 10 as the interest of Rs. 90 for 1 year so that nothing will be lost.
As we know the Simple interest formula,
| ⇒ Simple interest = | |
| 100 |
As per given question,
Simple interest = 10,
Principle amount = 90
Time = 1 year
Rate of interest = R
| ⇒ 10 = 90 × 1 × | |
| 100 |
| ⇒ R = 11 | % | |
| 9 |
