Question

Jessica wants to borrow an amount of 50.000 for 3 years. Bank A charges
compound interest at 5% per annum while Banks charges simple interest at
5% annually. Which offer is more profitable for Jessica?​

Answer 1

Given

• Principal= रु 50,000
• Rate= 5%
• Time= 3 years

To Find

• Which offer is more profitable for Jessica Compound Interest OR simple Interest.

1st We Calculate in Compound Interest

We Know That,

$~~~~~~~~~\boxed{\sf \pink{CI= P\{\left( 1+\dfrac{R}{100}\right) ^{n} -1\}}}$

$\implies\sf CI= 50000\{\left( 1+\dfrac{5}{100}\right)^{ 3} -1\}$

$\implies\sf CI= 50000\{\left( \dfrac{105}{100}\right) ^{3} -1\}$

$\implies\sf CI= 50000\{\left( \dfrac{21}{20}\right) ^{3} -1\}$

$\implies\sf CI= 50000\left( \dfrac{441}{400} - 1\right)$

$\implies\sf CI= 50000\left( \dfrac{441 - 400}{400} \right)$

$\implies\sf CI= 50000 \times \dfrac{41 }{400}$

$\implies\sf CI= 500 \times 41$

$~~~~~~~~~~~~~~~~~\underline{\boxed{\sf CI= 20500}}$

Now We Calculate Simple Interest

$~~~~~~~~~~\boxed{\pink{\sf SI= \dfrac{Principal×time × Rate}{100}}}$

$\implies\sf SI= \dfrac{50000 \times 3 \times 5}{100}$

$\implies\sf SI= \dfrac{750000}{100}$

$~~~~~~~~~~~~~~~~\underline{\boxed{\sf SI= 7500}}$

CI>SI

• Compound Interest is more Suitable For Jessica

Answer 2

Step-by-step explanation:

answer is in the attachment

hope this helps you