Question

JQUSLIUII.
Two Money lenders A and B lent Rajesh equal amount with rate of interest 6 % per annum. But A charges compound interest and B charges simple interest
return the amount. Find the ratio of the amounts Rajesh needs to pay after two years to B and A respectively.
Per
O 110: 100
18728611​

Answer 1

We need to recall the following formula to solve the problem

1. Simple interest =PRT/100

2. Compound interest $A=P(1+\frac{R}{100})^n$

Given two money lenders A and B lent Rajesh equal amount with rate of interest 6 % per annum. But A charges compound interest and B charges simple interest

Find the ratio of the amounts Rajesh needs to pay after two years to B and A respectively.

Let he lent x amount.

then

For A compound interest

$A=x(1+\frac{6}{100})^2$

  $=x(\frac{53}{50})^2$

  $=1.1236x$

For B simple interest

A=x*6*2/100

 =12x/100

then the ratio is

$B:A=\frac{\frac{12x}{100} }{1.1236x}$

          $\sim \frac{1}{9}$

Hence the ratio is 1:9.