Bharati borrows amount of 12,500 at 12% per annum for 3 years at SI and madhuri borrows same amount for same time period at 10% per annum compounded annually.who pays more and by how much?

Answer 1

1. P1 = Po + Po*r*t.
P1 = 12,500 + 12,500*0.12*3 =

2. P2 = Po(1+r)^n.

Po = 12,500, r = 0.10.

n = 1comp./yr. * 3yrs. = 3 compounding periods.

P1-P2 =

Answer 2

362.50

Answer 3

362.50

Answer 4

This answer is wrong