Rekha borrows . 12,500 at 12% per annum for 3 years at simple interest and Radha borrows the same amount for the same time period at 10% p.a., compounded annually. Who pays more interest and by how much?
Answers
Step-by-step explanation:
rekha's interest = principal × rate × time ÷100
= 12500×12×3÷100
= 4500
radha's interest = 12500×10×3÷100
=3750
rekha interest - radha interest
= 4500-3750
=750
rekha pays more interest by 750
Answer:
Rekha pays more interest and by ₹2637.5
Step-by-step explanation:
Simple Interest for Rekha,
Simple Interest = p*r*t/100
= 12,500*12*1/100
= 125*12 = 1500
Simple Interest = ₹1500
Compound Interest for Radha,
Interest for the first year = p*r*t/100
= 12500*10*1/100
= 1250
Amount = principal + interest
= 12500 + 1250 = 13750
Principal for the second year = 13750
Interest for the second year = p*r*t/100
= 13750*10*1/100
= 1375
Amount = principal + interest
= 13750 + 1375 = 15125
Principal for the third year = 15125
Interest for the third year = p*r*t/100
= 15125*10*1/100
= 1512.5
Compound Interest = 1250 + 1375 + 1512.5
= ₹4137.5
Radha pay more interest than Rekha and by 4137.5 - 1500 = 2637.5(answer).
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