Ahmed borrowed 8,000 at 10% per annum compounded annually for 1.5 years. Farhan borrowed 8,000 at 10% per annum compounded half yearly for 1.5 years Who pays more interest and by how much?
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Step-by-step explanation:
Amount to be paid at the end of two years will be =Amountafter2years=8000(1+
100
10
)
2
=8000(1.1)
2
=8000(1.21) =9680 Amount already paid in 2 years is(3200+1500)=4700 Therefore amount of loan outstanding at the beginning of third year will be(9680−4700)=4980
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