# A money lender claims to lend money at the rate of 10% per annum simple interest. However, he takes the interest in advance when he lends a sum for one year. At what interest rate does he lend the money actually

A. 10 B. $10 \frac{1}{9} \%$ C. 11 D. $11 \frac{1}{9} \%$ Answer: Option D
Let the principal be Rs. 100 Interest = Rs. 10 Actual principal = Rs. 90 ∵ Interest on Rs. 90 = Rs. 10 ∴ Interest on Rs.$100=\frac{10}{90} \times 100$ Interest on Rs.$100=\frac{100}{9}=11 \frac{1}{9} \%$