Question

20. Feroz borrowed Rs. 12,500 for 3 years from a bank, at the rate of 8% per annum.
Rashmi borrowed the same sum from another bank for 4 years at the rate of 6%
per annum. Who paid greater interest? Find the amount paid back by each of
them.​

Answer 1

$\huge\underline\bold\red{Answer:-}$

If the principal remains the same throughout the loan period then the interest calculated on this principle is called the simple interest.

 

where ,

$\implies$Principal (P): The original sum of money loaned/deposited. Also known as capital.

$\implies$Time (T): The duration for which the money is borrowed/deposited.

$\implies$Rate of Interest (R): The percent of interest that you pay for money borrowed, or earn for money deposited

Simple interest is calculated as :-

$\dashrightarrow$S.I= (P×R×T)/100

Total amount at the end of time period

A=  P + SI

 compound interest.

The time Period after which interest is added each time to form a new principal is called the conversion period and the interest so obtained is called a compound interest.

 

If the conversion period is 1 year then the interest is said to be compounded annually.

 

The main difference between the simple interest and compound interest on a certain sum is that in the case of simple interest the principal remains constant throughout wheras in the case of compound interest it goes on changing periodically.

 

The above formula is the interest compounded annually .

A= P(1+r/100)^n

 Compound interest= A-P

 

Where A is the amount ,

P  the principal,

r the rate percent per conversion period and n is the number of conversion 

periods .

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Given:-

Principal (P) = ₹12,500,

Time  (T)= 3 years,

$\textbf{\huge{\red{Solution:-}} }$

$\implies$Rate of

interest (R) = 12% p.a.

Simple Interest

for Fabina = (P×R×T)/100

= (12500× 12× 3)/100

= 125× 36

 = ₹ 4,500

Amount forRashmi,

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$\huge\underline\bold\blue{Given:-}$

P = ₹ 12,500, R = 10%   n= 3 years

Amount (A)  = P(1+R/100)^n

$\textbf{\huge{\red{Solution:-}} }$

= 12500(1+10/100)³

= 12500( 1+1/10)³

= 12500× (11/10)³

= (12500

×11×11×11)/1000

=125×1331/10=

166375/10

= Rs. 16,637.50

 C.I. for

Radha = A – P

= ₹16,637.50 – ₹12,500

= ₹ 4,137.50

$\huge\underline\bold\orange{final\:Answer}$

$\implies$ feroz pays more interest

= ₹4,500 – ₹4,137.50

= ₹ 362.50

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