Question

Fabulous borrow s ₹12500 at 12% per annual for 3 years at simple interest and Radio borrow s the same amount for the same period at 10% per annum compounded annualy.Who pays more interest and by how much? ​

Answer 1

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Step-by-step explanation:

Home / Fabina borrows Rs 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?

3 Fabina borrows Rs 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?

Answers (1)

H Harsh Kankaria

Answered 1 year, 5 months ago

For Fabina,

Principal,P =Rs 12500

Simple interest Rate,R = 12% p.a.

Time period,n = 3 years.

Simple Interest, SI at 12% for 3 years =

= Rs 4500

For Radha,

Principal,P =Rs 12500

Compound interest Rate,R = 10% p.a.

Time period,n = 3 years.

We know, Amount when interest is compounded annually,

Fabina pays more interest and Rs (4500 - 4137.50) = Rs 362.50 more.