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?
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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.