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To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simple interest and raghav borrows the same amount for the same time period at 10% p.a. compounded annually. Who pays more interest and by how much?
Most Upvoted Answer
To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simpl...
Use formula-
A=P(1+r/100)raised to the Power of n , where p is equals to principle, n is equals to time period, and R is equals to rate.
A=P(1+r/100)raised to the Power of n , where p is equals to principle, n is equals to time period, and R is equals to rate.
Community Answer
To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simpl...
Analysis:
To compare the interest paid by Rita and Raghav, we need to calculate the interest amount for both of them separately and then compare the values.
Calculation for Rita:
Principal amount (P) = ₹12500
Rate of interest (R) = 12% p.a.
Time period (T) = 3 years
Using the formula for simple interest:
Simple Interest (SI) = (P * R * T) / 100
Substituting the given values:
SI = (12500 * 12 * 3) / 100
SI = ₹4500
Therefore, Rita pays ₹4500 as simple interest over a period of 3 years.
Calculation for Raghav:
Principal amount (P) = ₹12500
Rate of interest (R) = 10% p.a.
Time period (T) = 3 years
Using the formula for compound interest:
Compound Interest (CI) = P * (1 + R/100)^T - P
Substituting the given values:
CI = 12500 * (1 + 10/100)^3 - 12500
CI = ₹3840.50 (rounded off)
Therefore, Raghav pays ₹3840.50 as compound interest over a period of 3 years.
Comparison:
Rita pays ₹4500 as simple interest, while Raghav pays ₹3840.50 as compound interest.
To find the difference in interest paid by both, we subtract the compound interest from the simple interest:
Difference = Simple Interest - Compound Interest
Difference = ₹4500 - ₹3840.50
Difference = ₹659.50
Conclusion:
Rita pays more interest than Raghav by ₹659.50 over a period of 3 years. This is because compound interest is calculated on the principal amount as well as the accumulated interest, resulting in a higher interest amount compared to simple interest.
To compare the interest paid by Rita and Raghav, we need to calculate the interest amount for both of them separately and then compare the values.
Calculation for Rita:
Principal amount (P) = ₹12500
Rate of interest (R) = 12% p.a.
Time period (T) = 3 years
Using the formula for simple interest:
Simple Interest (SI) = (P * R * T) / 100
Substituting the given values:
SI = (12500 * 12 * 3) / 100
SI = ₹4500
Therefore, Rita pays ₹4500 as simple interest over a period of 3 years.
Calculation for Raghav:
Principal amount (P) = ₹12500
Rate of interest (R) = 10% p.a.
Time period (T) = 3 years
Using the formula for compound interest:
Compound Interest (CI) = P * (1 + R/100)^T - P
Substituting the given values:
CI = 12500 * (1 + 10/100)^3 - 12500
CI = ₹3840.50 (rounded off)
Therefore, Raghav pays ₹3840.50 as compound interest over a period of 3 years.
Comparison:
Rita pays ₹4500 as simple interest, while Raghav pays ₹3840.50 as compound interest.
To find the difference in interest paid by both, we subtract the compound interest from the simple interest:
Difference = Simple Interest - Compound Interest
Difference = ₹4500 - ₹3840.50
Difference = ₹659.50
Conclusion:
Rita pays more interest than Raghav by ₹659.50 over a period of 3 years. This is because compound interest is calculated on the principal amount as well as the accumulated interest, resulting in a higher interest amount compared to simple interest.
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To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simple interest and raghav borrows the same amount for the same time period at 10% p.a. compounded annually. Who pays more interest and by how much?
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To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simple interest and raghav borrows the same amount for the same time period at 10% p.a. compounded annually. Who pays more interest and by how much? for Class 8 2024 is part of Class 8 preparation. The Question and answers have been prepared according to the Class 8 exam syllabus. Information about To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simple interest and raghav borrows the same amount for the same time period at 10% p.a. compounded annually. Who pays more interest and by how much? covers all topics & solutions for Class 8 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simple interest and raghav borrows the same amount for the same time period at 10% p.a. compounded annually. Who pays more interest and by how much?.
To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simple interest and raghav borrows the same amount for the same time period at 10% p.a. compounded annually. Who pays more interest and by how much? for Class 8 2024 is part of Class 8 preparation. The Question and answers have been prepared according to the Class 8 exam syllabus. Information about To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simple interest and raghav borrows the same amount for the same time period at 10% p.a. compounded annually. Who pays more interest and by how much? covers all topics & solutions for Class 8 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for To buy a laptop, Rita borrowed ₹12500 at 12% p.a. for 3 years at simple interest and raghav borrows the same amount for the same time period at 10% p.a. compounded annually. Who pays more interest and by how much?.
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