Shortcut Trick
Effective rate 1 = (15 ÷ 12) × 9.6% = 12%
Effective rate 2 = (8 ÷ 12) × 11.4% = 7.6%
Difference in interest = 12% − 7.6% = 4.4%
4.4% of Sum = ₹1,320
Sum = 1,320 ÷ 0.044 = ₹30,000
∴ The correct answer is ₹30,000.
Alternate Method
Given:
Case 1: Time (T1) = 15 months = 15/12 years, Rate (R1) = 9.6%
Case 2: Time (T2) = 8 months = 8/12 years, Rate (R2) = 11.4%
Formula Used:
Simple Interest (SI) = (P × R × T) ÷ 100
Calculations:
⇒ SI1 = (P × 9.6 × 15) ÷ (100 × 12)
⇒ SI1 = (P × 0.8 × 15) ÷ 100 = 12P ÷ 100
⇒ SI2 = (P × 11.4 × 8) ÷ (100 × 12)
⇒ SI2 = (P × 11.4 × 2) ÷ (100 × 3) = (P × 3.8 × 2) ÷ 100 = 7.6P ÷ 100
⇒ SI1 − SI2 = 1,320
⇒ (12P − 7.6P) ÷ 100 = 1,320
⇒ 4.4P ÷ 100 = 1,320
⇒ P = (1,320 × 100) ÷ 4.4
⇒ P = 132,000 ÷ 4.4 = 30,000
∴ The correct answer is ₹30,000.
Additional Information
Simple Interest Concept
Simple interest is calculated only on the Principal amount. The interest remains constant for every year if the rate is fixed.
Time Conversion
Always convert time into years when the rate is given per annum (p.a.). Months ÷ 12 = Years.
Effective Rate of Interest
Effective Rate = R × T. This allows for direct calculation of interest as a percentage of the Principal.