A financier claims to be lending money at simple 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 the correct choice from the following options.
A) 9.25% B) 10% C) 10.25% D) 9% E) None of these
Explanation :   Let the sum is 100.   As financier includes interest every six months , then we will calculate SI for 6 months, then again for six months as below:   SI for first Six Months = (100*10*1)/(100*2) = Rs. 5   Important: now sum will become  100+5= 
<gadget id="calculator"> 100+5</gadget>
<output>105</output>
105   SI for last Six Months= (105*10*1)/(100*2) = Rs. 5.25   So amount at the end of year will be  (100+5+5.25)= 
<gadget id="calculator"> (100+5+5.25)</gadget>
<output>110.25</output>
110.25   Effective rate= 110.25 - 100= 
<gadget id="calculator">110.25 - 100</gadget>
<output>10.25</output>
10.25   Answer : 10.25%
<result>C</result>
A financier claims to be lending money at simple 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.