Question

a man borrows rupees 14500 at 11% per annum for 3 years at simple interest and Tarun borrow the same amount at 10% per annum for the same time compounded annually who pays more interest and by how much

Answer 1

Hi there!

Case 1:

Principal amount; P = Rs.14500

Rate; R = 11% p.a.

Time; T = 3 years

Simple Interest = P × R × T/100 = 14500 × 11 × 3/100 = Rs. 4785

Therefore Aman has to pay Rs.4785 interest.

Case 2:

Principal amount; P = Rs.14500

Rate; R = 10% p.a.

Time; T = 3 years

So the amount accumulated after 3 years;

A = $P(1 + R/100)^T$ = 14500 × (1+10/100)³ = Rs.19299.5

Then Compound interest = Rs.19299.5 - Rs.14500 = Rs.4799.50

Therefore Tarun has to pay Rs.4799.50 interest.

This means Tarun pays more interest and by (Rs.4799.50 - Rs.4785) = Rs 14.50

Cheers!

Answer 2

Aman :-

Principal amount = Rs.14500

Rate = 11% p.a.

Time = 3 years

Simple Interest = P × R × T/100

= 14500 × 11 × 3/100

= Rs. 4785

Tarun :-

Principal amount = Rs.14500

Rate; R = 10% p.a.

Time; T = 3 years

A = 14500 × (1+10/100)³

= Rs.19299.5

Then Compound interest

= Rs.19299.5 - Rs.14500

= Rs.4799.50

This means Tarun pays more interest and by (Rs.4799.50 - Rs.4785) = Rs 14.50

Hope.it.helps.you.