Q12 of 48 Page 118

Bharathi borrows an amount of Rs. 12500 at 12% per annum for 3 years at a simple interest and Madhuri borrows the same amount for the same time period at 10% per annum, compounded annually. Who pays more interest and by how much?

Principal (P) = Rs. 12500

Rate of interest (R) = 12%


Time period (T) = 3years


Interest paid by bharathi,




I = Rs. 4500


∴ Interest paid by bharathi is Rs. 4500


Amount paid by madhuri,


Principal (P) = Rs. 12500


Rate of interest (R) = 10%


Time period (n) = 3years




= 12500×1.13


= Rs. 16637.5


∴ Amount paid by madhuri isRs. 16637.5


Interest = A-P


= Rs. 16637.5 – 12500


= Rs. 4137.5


∴ Interest paid by madhuri is Rs. 4137.5


On comparing the interests paid by bharathi and madhuri,


4500-4137.5 = 362.5


∴ Bharathi paid Rs.362.5 more than by madhuri.


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