Here’s and example of a SMART MATH problem for PERCENTAGES.
Problem
A money lender lends $400 for 2 years and $200 for 3 years, at the same rate on simple interest and receives $70 as interest. What is the interest rate?
- 3.33%
- 4.00%
- 5.00%
- 8.33%
- 12.5%
The Usual Method
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Let ‘r’ be the rate of interest.
Hence, interest earned on $400 for 2 years =
Similarly, interest earned on $200 for 3 years =
Hence, total interest earned = = $70
%
(Ans: 3)
Estimated Time to arrive at the answer = 45 seconds.
Using Technique
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Interest on $400 for 2 years is equivalent to that for $200 for 4 years. Thus effectively $200 can be said to be lent for 4 + 3 = 7 years
Interest earned =
%
(Ans: 3)
Estimated Time to arrive at the answer = 15 seconds.
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