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?
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Answer 1

Answer:

$\mathbb \purple{\underline{GIV€N \: QU€STION}}$

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?

$\purple{\rule{45pt}{7pt}}\red{\rule{45pt}{7pt}}\pink{\rule{45pt}{7pt}}\blue{\rule{45pt}{7pt}}$

In case of Fabina:

P=Rs.12500

R=12% per annum and T=3 years, then

$SI = \sf \red{\frac{P × R × T}{100}} = \: Rs\sf \green{\frac{12500 × 12 × 3}{100}} = \mathfrak \purple{Rs.4500}$

In case of Radha:

Amount = P(1 + $(\frac{R}{100})^T$

Amount = Rs.[12500 × (1 + $(\frac{10}{100})^3]$

= Rs.(12500 × $\frac{110}{100} × \frac{110}{100} × \frac{110}{100}$

=Rs.16637.50

∴ Compound Interest =Rs.(16637.50−12500)=Rs.4137.50

• Hence, Fabina pays Rs.(4500−4137.50),i.e.,Rs.362.50 more as interest.

$\purple{\rule{45pt}{7pt}}\red{\rule{45pt}{7pt}}\pink{\rule{45pt}{7pt}}\blue{\rule{45pt}{7pt}}$

Answer 2

Answer:

☢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.

☢To find :

• Who pays more interest and by how much?

☢Solution :

P. = Rs. 12500

R. = 12%

T = 3 yrs

$\sf \underline{ \bigstar\red \: Formula \: used : }$

$\sf{S.I .= \frac{P×R×T}{100} }$

$\sf \red{SI = \frac{12500 \times 12 \times 3}{100} \pink{= 4500}}$

Now, Calculate the amount of Radha :

Amount = P ( 1 + (R/100)T )

Amount = Rs. ( 12500 × (1 + (10/100)3 )

↦Rs. ( 12500 × (110/100) × (110/100) × (110/100)

↦Rs. 16637.50

Compound Interest:

↦ Rs. ( 16637.50 - 12500 )

↦ Rs. 4137.50