Question

Reena and ruchira are borrowed 60000 and 50000 rupees respectively for a period of 3 years Venus simple interest @ 10% while loop a compound interest @ 10% compounded annually who paid more interest and by how much?

Answer 1

Reena :

The principle amount = 60000

It is compounded for 3 years.

Rate of interest = 10%

Compound interest accumulated amount.

Amount = 60000 × (1.1)³ = 79860

Interest = 79860 - 60000 = 19860

Ruchira :

Principle amount = 50000

Rate of interest = 10%

Time = 3 years

Interest = 50000 × 10/100 × 3 = 15000

Reena paid more by :

19860 - 15000 = 4860