Question

Bharathi borrows an amount of Rs. 12500 at 12% per annum for 3 years at a simple interest and Madhuri borrows the same amount for the same time period at 10% per annum, compounded annually. Who pays more interest and by how much?

Answer 1

Answer:

Step-by-step explanation:

Principal = p = Rs. 12500

Rate of interest = r = 12%

Time period = t = 3 yrs

Interest paid by Bharathi - (P×R×T)/100

= 12500× 12× 3/100

= 4,500

Amount paid by Madhuri -  P(1+R/100)`n

= 12500 (1+10/100)³

= 12500( 1+1/10)³

= 12500 × (11/10)³

= 12500 × 1331/10

= 16,637.5

Interest = A-P

= 16637.5 – 12500

= 4137.5

Thus, the interest paid by Bharathi and Madhuri -

= 4500-4137.5

= 362.5

Therefore Bharathi pays an amount of Rs. 362.5 more than Madhuri.

Answer 2

Answer:

Step-by-step explanation:

Step-by-step explanation:

Principal = p = Rs. 12500

Rate of interest = r = 12%

Time period = t = 3 yrs

Interest paid by Bharathi - (P×R×T)/100

= 12500× 12× 3/100

= 4,500

Amount paid by Madhuri - P(1+R/100)`n

= 12500 (1+10/100)³

= 12500( 1+1/10)³

= 12500 × (11/10)³

= 12500 × 1331/10

= 16,637.5

Interest = A-P

= 16637.5 – 12500

= 4137.5

Thus, the interest paid by Bharathi and Madhuri -

= 4500-4137.5

= 362.5

Therefore Bharathi pays an amount of Rs. 362.5 more than Madhuri.