Question

Aman borrows 14500 at 11%per annum for three years at simple interest and tarun borrows the same amount at 10%per annum for the same time compounded annually . who pays more interest and by how much

Answer 1

For S.I.

Money Aman borrowed or Principal= ₹14500

Interest= 11% p.a.

Time= 3 yrs.

S.I.=$\frac{P*R*T}{100}$

=$\frac{14500*11*3}{100}$

=₹4785

Amount= P+S.I.

=14500+4785

=₹19285

For C.I.

• For first year

Money Tarun borrowed or Principal 1=₹14500

Interest= 10% p.a.

Time= 1 yr.

S.I.=\frac{P1*R*T}{100}

=$\frac{14500*10*1}{100}$

=₹1450

Amount= P1+S.I.

=14500+1450

=₹15950

• For second year

Principal 2= ₹15950

Interest= 10% p.a.

Time= 1 yr.

S.I.=\frac{P2*R*T}{100}

=$\frac{15950*10*1}{100}$

=₹1595

Amount=P2+S.I.

=15950+1595

=₹17545

• For third year

Principal 3= ₹17545

Interest= 10% p.a.

Time= 1 yr.

S.I.=\frac{P3*R*T}{100}

=$\frac{17545*10*1}{100}$

=₹1754.5

Amount=P3+S.I.

=17545+1754.5

=19299.5

Arun paid ₹19285 and Tarun paid ₹19299.5. Clearly, Tarun paid more than Arun.

Difference between the Amounts of both= ₹19299.5-₹19285

                                                                    = ₹14.5

Therefore, Tarun paid ₹14.5 more than Arun.