Question

Rani wants to borrow rs5000 for 2 years at5%in simple interest and compound interest ways which way to borrow money is helpful to ravi justify it

Answer 1

on simple interest
si=p*r*t/100
=5000*2*5/100
=500
amount she have to pay after two years
amount =principle +simple interest
amount =5500

on compound interest
amount=p(1+R/100)^t
amount=5000(1+5/100)^2
amount=5000(1.05)^2
= 5000*1.1025
=5512.5
as amount in case of si is less therefore she should borrow money on simple interest