Rohit borrowed * 40,000 for 2 years at 10% per annum C.I. and Manish borrowed the same sum for the same time at 10.5% per annum simple interest. Which of these two gives less interest and by how much?
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Step-by-step explanation:
Sum borrowed (P) = ₹40000
Rate (R) = 10% p.a. compounded annually
Time (T) = 2 years
∴ Interest for first year = PRT/100
= ₹ (40000 × 10 ×1)/100 = ₹ 4000
Amount after one year = ₹ 40,000 + 4000 = ₹44000
Principal for the second year = ₹44000
∴ Interest for the second year
= (44000 × 10 ×1)/100 = ₹ 4400
∴ C.I. Interest for 2 years = ₹4000 + 4400
= ₹ 8400
In second case,
Principal (P) = ₹40000
Rate (R) = 10.5% p.a.
Time (T) = 2 years
∴ S.I. Interest = PRT/100 = (40000 × 10.5 ×2)/100
= ₹ (40000 × 105 × 2)/(100 × 10) = ₹8400
In both the cases, interest is same.
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