arithmetic - 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 - skillgun

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 = 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)
= 110.25
Effective rate = 110.25 - 100 = 10.25