Shortcut Trick
Simple Interest (SI) for 2 years (6 − 4) = 7,680 − 6,720 = ₹960
SI for 1 year = 960 ÷ 2 = ₹480
Principal (P) = Amount in 4 years − SI for 4 years = 6,720 − (480 × 4) = ₹4,800
Annual Rate (R) = (SI for 1 year ÷ Principal) × 100 = (480 ÷ 4,800) × 100 = 10%
∴ The correct answer is 10%.
Alternate Method
Given:
Amount after 4 years (A4) = ₹6,720
Amount after 6 years (A6) = ₹7,680
Formula Used:
Amount = Principal (P) + Simple Interest (SI)
SI = (P × R × T) ÷ 100
Calculations:
⇒ SI for 2 years = A6 − A4 = 7,680 − 6,720 = ₹960
⇒ SI for 1 year = 960 ÷ 2 = ₹480
⇒ SI for 4 years = 480 × 4 = ₹1,920
⇒ Principal (P) = A4 − SI4 = 6,720 − 1,920 = ₹4,800
⇒ Rate (R) = (SI for 1 year × 100) ÷ P
⇒ R = (480 × 100) ÷ 4,800
⇒ R = 48,000 ÷ 4,800 = 10%
∴ The correct answer is 10%.
Additional Information
Simple Interest Constant Property
In Simple Interest, the interest earned remains the same every year as it is always calculated on the original Principal.
Finding Rate of Interest
The annual rate can be found using R = (SI for 1 year × 100) ÷ P, where P is the initial sum.
Amount and Principal Relationship
Amount (A) = P × [1 + (R × T)/100]. To find P when two amounts are given, subtract the respective SI from the total amount.