Question

Sujatha borrows Rs.12,500 at 12% per annum for 3 years at simple interest and Radhika borrows the same amount for the same period at 10% per annum compounded annually.Who pays more interest and by how much?

Answer 1

amount= principal (1+R/100)^y

A=12500×(110/100)×(110/100)×(110/100)
A=16637.5

Compound interest=16637.5-12500=4137.5

si= 12500*3*12/100=4500

Answer 2

Answer:

Sujatha paid Rs. 362.5 more interest than Radhika.

Step-by-step explanation:

It is given that Sujatha borrows Rs.12,500 at 12% per annum for 3 years at simple interest.

$I=\frac{P\times r\times t}{100}$

Where, P is principal , r is rate of interest and t is time in years.

$I=\frac{12500\times 12\times 3}{100}=4500$

The interest paid by Sujatha is Rs. 4500.

Radhika borrows the amount Rs. 12.500 for the 3 years at 10% per annum compounded annually.

$I=P(\frac{r}{100})^t$

Where, P is principal , r is rate of interest and t is time in years.

$A=12500(\frac{10}{100})^3=16637.5$

$I=A-P=16637.5-12500=4137.5$

The interest paid by Radhika is Rs. 4137.5.

$4500-4137.5=362.5$

Therefore Sujatha paid Rs. 362.5 more interest than Radhika.