Shortcut Trick
Rate = 12.5% = 1/8 per year.
For 2 years, Total Interest = 2 × (1/8) = 1/4 of Principal.
Amount = Principal + Interest = 1 + 1/4 = 5/4 units.
5 units = ₹8,250 ⇒ 1 unit (Interest) = 8,250 ÷ 5 = ₹1,650.
∴ The correct answer is ₹1,650.
Alternate Method
Given:
Rate (R) = 12.5% per annum
Time (T) = 2 years
Amount (A) = ₹8,250
Formula Used:
Simple Interest (SI) = (P × R × T) ÷ 100
Amount (A) = P + SI = P × [1 + (R × T) ÷ 100]
Calculations:
⇒ 8,250 = P × [1 + (12.5 × 2) ÷ 100]
⇒ 8,250 = P × [1 + 25 ÷ 100]
⇒ 8,250 = P × [1 + 0.25]
⇒ 8,250 = 1.25P
⇒ P = 8,250 ÷ 1.25 = ₹6,600
⇒ SI = Amount − Principal
⇒ SI = 8,250 − 6,600 = ₹1,650
∴ The correct answer is ₹1,650.
Additional Information
Simple Interest vs Compound Interest
In Simple Interest, the interest is calculated only on the Principal amount, whereas in Compound Interest, interest is calculated on the Principal plus accumulated interest.
Effective Rate of Interest
For Simple Interest, the effective rate for 'n' years is simply (R × n)%. For 12.5% over 2 years, the effective rate is 25%.
Fractional Conversion
Converting percentages to fractions (e.g., 12.5% = 1/8) often simplifies calculations in Aptitude exams.