Here’s and example of a SMART MATH problem for PERCENTAGES.
Problem
How much will $12,000 amount to in 2 years at compound interest if the rates for the 2 years are 5% and 7% per annum?
- $12,662
- $15,248
- $14,336
- $13,884
- $13,482
The Usual Method
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Original Principle = $12,000
Principle after 1st year = 12,000 x 1.05 = $12,600
Principle after 2nd year = 12,600 x 1.07 = $13,482
(Ans: 5)
Estimated Time to arrive at the answer = 60 seconds
Using Technique
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105 x 107 = 11235 (using Mental Math technique discussed in Multiplication Shortcuts
Now, 12,000 x 1.1235 is approximately equal to a 12 % increase in 12,000
i.e. 
Hence, the new Principle = 12,000 + 1440 = 13,440
However, this is an approximate answer. The real answer will be slightly greater than 13,440 (since, 1.1235 > 1.12). Thus looking at the options the answer is Rs, 13,482 – option ‘5’.
(Ans: 5)
Estimated Time to arrive at the answer = 10 seconds
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