Pooja borrows Rs.12,500 at 12% per annum on simple interest for 3
years. Prem borrows the same amount for the same period at 10% per
annum compounded annually. Who pays more interest and by how much?
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1
Answer:
Step-by-step explanation:
In case of Fabina:
P=Rs.12500
R=12% per annum and T=3 years, then
SI=
100
P×R×T
=Rs.(
100
12500×12×3
)=Rs.4500
In case of Radha:
Amount=P(1+
100
R
)
T
Amount=Rs.[12500×(1+
100
10
)
3
]
=Rs.(12500×
100
110
×
100
110
×
100
110
)=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.
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