Question

Anjali borrowes ₹12500 at 8% per annum for 3 years at simple interest and reema borrows the same amount for the some time period at 4% per annum compounded annually. Who plays more interest and how much?​

Answer 1

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1) Anjali
P = Rs 12500
R = 8%
T = 3 years
SI = PRT/100
= 12500*8*3/100
= 125*24
SI = Rs. 3000


2) Reema
A = P(1+R/100)^n
= 12500 ( 1+4/100)^3
= 12500(26/25)^3
= 12500*26*26*26/25*25*25
A = Rs. 14060.8

CI = A - P
= 14060.8 - 12500
CI = Rs. 1560.8


Anjali pays more interest than Reema

Difference = Anjali’s interest - Reema’s interest
= 3000-1560.8
Difference = Rs. 1439.2

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