fabina borrows ₹12,500 at 12% per annum for 3 years at simple interest and radha borrows same amount for the same time period at 10% per annum compounded annually. Who pays more interest and by how much
Answers
Question :-
Fabina borrows ₹ 12,500 at 12% per annum for 3 years at simple interest and Radha borrows the same amount for the same time period at 10% per annum, compounded annually. Who pays more interest and by how much?
Given :-
Fabina borrows ₹ 12,500 at 12% per annum for 3 years at simple interest and Radha borrows the same amount for the same time period at 10% per annum, compounded annually.
Find Out :-
Who pays more interest and by how much?
Solution :-
Let fabina pays x amount of interest and radha pays y amount of interest .
Now , we will see the amount paid by both after 3 years.
For finding amount paid by Fabina -
P = Rs. 12,500
N = 3 years.
R = 12%
✭ ✭
➙
➙
For finding amount paid by Radha -
P = Rs. 12500
N = 3 years.
R = 10% which is compounded annually.
✭ ✭
➙
➙
➙
➙
∴ CI = Rs. 16637.5 - 12500
➙ Rs. 4137. 50
Therefore , amount paid by radha = Rs. 4137.50
So , difference of money
➙ Rs. 4500 - Rs. 4137.50
➙ Rs. 362.5
Henceforth, Fabina pays Rs. 362.5 more.