Question

bharathi borrows an amount of Rs 12500 at 12percentage per annum for 3years at a simple interest and Madhuri borrows the same amount for the same time period at 10 percent per annum compounded anullay .who pays more interes and by how much?​

Answer 1

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8th

Maths

Comparing Quantities

Compound Interest

Bharathi borrows an amount ...

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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

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ANSWER

For Bharathi

P=12500,R=12%,T=3

SI=

100

PRT

=

100

(12500×12×3)

Interest =44500

For Madhuri

P and T are same but R=10% compounded annually

CI=P(1+

100

R

)

T

−P

=12500(1+

100

10

)

3

−12500

CI=16637.5−12500

Interest =4137.5

Comparing the interest paid by Bharathi and Madhuri we can see that Bharathi has to pay more and it is equal to the difference(4500−4137.5)=Rs.362.5