interest, but he includes the interest every six months for calculating the principal. If he is charging an interest of 10%, the effective rate of interest becomes: Choose one:
A) 10% B) 10.25% C) 10.6% D) 10.75% E) 11%
Let the sum be Rs. 100. Then,   S.I. for first 6 months= Rs. (100x10x1) / ( 100x2 ) –Rs. 5   S.I. for last 6 months =Rs. (105x10x1)/(100x2) =Rs.5.25   So amount at the end of 1 year =Rs.(100+5+5.25) = Rs. 110.25   Effective = (110.25-100)= 
<gadget id="calculator">(110.25-100)</gadget>
<output>10.25</output>
10.25%   answer :10.25%
<result>B</result>
interest, but he includes the interest every six months for calculating the principal. If he is charging an interest of 10%, the effective rate of interest becomes: