Shortcut Trick
Net Simple Interest percentage for Case 1 = 7% × 3 = 21%
Interest 1 (SI1) = 21% of ₹2,000 = ₹420
Net Simple Interest percentage for Case 2 = 6% × 2 = 12%
Interest 2 (SI2) = 12% of ₹3,200 = ₹384
Required Difference = 420 − 384 = ₹36
∴ The correct answer is ₹36.
Alternate Method
Given:
Principal1 (P1) = ₹2,000, Rate1 (R1) = 7%, Time1 (T1) = 3 years
Principal2 (P2) = ₹3,200, Rate2 (R2) = 6%, Time2 (T2) = 2 years
Formula Used:
Simple Interest (SI) = (P × R × T) ÷ 100
Calculations:
⇒ SI1 = (2000 × 7 × 3) ÷ 100
⇒ SI1 = 20 × 21 = ₹420
⇒ SI2 = (3200 × 6 × 2) ÷ 100
⇒ SI2 = 32 × 12 = ₹384
⇒ Difference = SI1 − SI2
⇒ Difference = 420 − 384 = ₹36
∴ The correct answer is ₹36.
Additional Information
Simple Interest (SI)
The interest calculated only on the initial principal amount for the entire duration. Formula: SI = (P × R × T)/100.
Total Amount (A)
The total sum of money returned after the time period, which includes the principal and the interest. A = P + SI.
Effective Rate of Interest
For Simple Interest, the effective rate for the entire period is simply the product of the annual rate and time (R × T)%.
Difference between SI and CI
For a 2-year period, the difference between Compound Interest and Simple Interest is given by: D = P(R/100)2.