A sum of money invested at a certain rate of simple interest per annum amounts to in eight years and to in thirteen years. Find the sum invested.
- AOption (a)
30000
- BOption (b)
25000
- COption (c)
35000
- DOption (d)
36000
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Correct answer
25000
Why this answer is correct
Shortcut Trick
Interest for 5 years (13 − 8) = ₹64000 − ₹49000 = ₹15000
Interest for 1 year = ₹15000 ÷ 5 = ₹3000
Interest for 8 years = 8 × ₹3000 = ₹24000
Sum invested = Amount in 8 years − Interest for 8 years = ₹49000 − ₹24000 = ₹25000
∴ The correct answer is ₹25000.
Alternate Method
Given:
Amount after 8 years (A8) = ₹49000
Amount after 13 years (A13) = ₹64000
Formula Used:
Simple Interest (SI) = (P × R × T) / 100
Amount (A) = Principal (P) + Simple Interest (SI)
Calculations:
⇒ Interest for 5 years = A13 − A8
⇒ Interest for 5 years = 64000 − 49000 = 15000
⇒ Simple Interest for 1 year = 15000 ÷ 5 = 3000
⇒ Simple Interest for 8 years = 8 × 3000 = 24000
⇒ Sum invested (P) = A8 − SI for 8 years
⇒ P = 49000 − 24000 = 25000
∴ The correct answer is ₹25000.
Additional Information
Simple Interest Concept
In simple interest, the interest remains the same for every year because it is always calculated on the original Principal (P).
Rate of Interest Formula
Rate (R) = (SI × 100) / (P × T). In this question, R = (3000 × 100) / (25000 × 1) = 12% per annum.
Compound Interest Difference
Unlike simple interest, Compound Interest (CI) increases every year as interest is calculated on the previous year's amount (Interest on Interest).