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An automobile 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:

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An automobile 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: Answer: 10.25%

Question context

This question is part of 📏 Arithmetic Aptitude within the broader 🧠 Aptitude Mastery subject and appears in the DemoPaper-Pakistan preparation collection. Reviewing the answer together with nearby questions helps reinforce the underlying concept and identify how it may appear in competitive exams.