Q13 of 94 Page 29

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?

sujatha

Principle = 12,500


Interest = 12%


Time = 3 years


Simple interest =


=


= 4,500


Radhika


Principle = 12,500


Interest = 10%


Time = 3 years


Amount =


=


= 16,637.5


Compound interest = Amount – principle


= 16,637.5 – 12,500


= 4,137.5


∴ Sujatha pays 362.5 more than Radhika


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