Question: What is the effective interest rate if the Banker\'s Discount on a loan of $2000 for 1 year at 15% is $300?

Options:

1. 15%
2. 20%
3. 25%
4. 10%

Correct Answer: 15%

Solution:

Effective Interest Rate = (Banker\'s Discount / Principal) × 100 = (300 / 2000) × 100 = 15%.