Question

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?

Answer 1

Interest for Radha = 16637.50-12500=4137.50
Interest paid by Fabina is Rs. 362.50 more than that paid by Radha.