Question

Aman borrows Rs 14500 at 11% per annum for 3 years at simple interest and Tarun borrows the same amount at 10% per annum for same time compounded annualy.who pays more interest and by how much

Answer 1

14500×11×3/100=4785
CI=19299.5
Tarun pays more by=14514.5

Answer 2

Answer:

Aman pays more interest by Rs.1740

Step-by-step explanation:

Aman's Case:

Principal = Rs.14500

Rate of interest = 11%

Time = 3 years

$SI= \frac{P \times R \times T}{100}$

$SI= \frac{14500 \times 11 \times 3}{100}$

$SI= 4785$

Tarun's case :

Principal = Rs.14500

Rate of interest = 10% = 0.1 compounded annually

Time = 3 years

$A=P(1+r)^t$

$A=14500(1+0.1)^2$

$A=17545$

Compound interest = Amount - Principal = Rs.17545-Rs.14500=Rs.3045

Difference between Si and CI = Rs.4785-Rs.3045 = Rs.1740

So, Aman pays more interest by Rs.1740.