Shortcut Trick
In Simple Interest, the interest earned remains constant every year.
SI for 1.5 years (4.5 − 3) = 16860 − 15240 = ₹1620
SI for 1 year = 1620 ÷ 1.5 = ₹1080
Principal = Amount in 3 years − SI for 3 years = 15240 − (3 × 1080) = ₹12000
Rate of Interest (R) = (1080 ÷ 12000) × 100 = 9%
∴ The correct answer is 9%.
Alternate Method
Given:
Amount in 3 years (A1) = ₹15,240
Amount in 4.5 years (A2) = ₹16,860
Formula Used:
Simple Interest (SI) = (P × R × T) ÷ 100
Amount (A) = P + SI
Principal (P)
₹15,240
₹16,860
Year 0
Year 3
Year 4.5
SI for 3 yrs
SI for 1.5 yrs = ₹1,620
Calculation:
⇒ Difference in time = 4.5 − 3 = 1.5 years
⇒ Simple Interest for 1.5 years = A2 − A1
⇒ SI for 1.5 years = 16,860 − 15,240 = ₹1,620
⇒ SI for 1 year = 1,620 ÷ 1.5 = ₹1,080
⇒ SI for 3 years = 1,080 × 3 = ₹3,240
⇒ Principal (P) = A1 − SI for 3 years
⇒ P = 15,240 − 3,240 = ₹12,000
⇒ Rate (R) = (SI for 1 year × 100) ÷ Principal
⇒ R = (1,080 × 100) ÷ 12,000
⇒ R = 1,08,000 ÷ 12,000 = 9%
∴ The correct answer is 9%.
Additional Information
Simple Interest (SI)
It is calculated only on the original principal. SI = (P × R × T) ÷ 100.
Constant Annual Interest
In simple interest, the interest earned each year is constant. The difference between amounts in different years is solely due to the accumulated interest.
Compound Interest (CI)
It is calculated on both the original principal and accumulated interest. Formula: A = P(1 + R/100)n.
Amount Formula for SI
The total amount after T years is given by A = P + SI = P(1 + RT/100).