A money lender claims to lend money at the ra | vedclass

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(D) Let the principal amount be $P = 100$. Given that the interest rate is $10 \%$ per annum. The interest for one year is calculated as $I = \frac{P

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$11 \frac{1}{9} \%$

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(D) Let the principal amount be $P = 100$. Given that the interest rate is $10 \%$ per annum. The interest for one year is calculated as $I = \frac{P 	imes R 	imes T}{100} = \frac{100 	imes 10 	imes 1}{100} = 10$. Since the money lender takes the interest in advance,the actual amount he gives to the borrower is $100 - 10 = 90$. Therefore,the borrower effectively receives $90$ and pays $10$ as interest for one year. The actual rate of interest is calculated as $	ext{Rate} = \frac{	ext{Interest}}{	ext{Actual Principal}} 	imes 100$. $	ext{Rate} = \frac{10}{90} 	imes 100 = \frac{100}{9} = 11 \frac{1}{9} \%$.

$A$ 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?

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