Fabina borrows Rs 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% per annum, compounded annually. Who pays more interest and by how much?
Here, Principal (P) = Rs.12,500, Time, (T) = 3 years, Rate of interest (R) = 12% p.a.
Simple Interest for Fabina = PRT/100
= Rs. 4,500
Amount for Radha, P = Rs. 12,500, R = 10% and n = 3 years
= Rs. 16,637.50
∴ C.I. for Radha = A – P
= Rs. 16,637.50 – Rs. 12,500 = Rs. 4,137.50
Here, Fabina pays more interest
= Rs. 4,500 – Rs. 4,137.50 = Rs. 362.50
Calculate the amount and compound interest on
(a) Rs 10,800 for 3 years at per annum compounded annually.
(b) Rs 18,000 for years at 10% per annum compounded annually.
(c) Rs 62,500 for years at 8% per annum compounded half yearly.
(d) Rs 8,000 for 1 year at 9% per annum compounded half yearly.
(You could use the year by year calculation using SI formula to verify).
(e) Rs 10,000 for 1 year at 8% per annum compounded half yearly.