Momentum of bullet $ = 10^{-2} \times 2 \times 10^2 = 2\, kg\, ms^{-1} $ .
Let the combined velocity of the bob $ + $ bullet $ = v $ .
Momentum of bob $ + $ bullet $ = (10^{-2} + 1)v = 1.01\, v $ .
By conservation of momentum, $ 1.01\, v = 2\, kg\, ms^{-1} $
or $ v = \frac{2}{1.01}=1.98\,ms^{-1} $ .
By conservation of energy
$ \frac{1}{2}\left(M + m\right)v^{2} = \left(M + m\right)gh $
or $ = h = \frac{v^{2}}{2\,g} = \frac{\left(1.98\right)^{2}}{2 \times 10} $
$ = 0.19 \simeq 0.2\,m $