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# Fabina borrows ₹ 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?

**Solution:**

For Simple Interest:

A = (P × R × T)/100

P = ₹ 12,500

T = 3 years

R = 12% simple interest

where , A = Amount, P = Principal, T = Time period in years and R = Rate percent

Thus, Simple Interest paid by Fabina for 3 years at the rate of 12% per annum

S.I. for 3 years = (3 × 12500 × 12)/100

= 3 × 125 × 12

= 4500

For Compound Interest:

A = P[1 + (r/100)]^{n}

P = ₹ 12,500

n = 3 years

R = 10% compounded annually

Thus, Amount paid by Radha for 3 years at the rate of 10% p.a. compounded annually

A = P[1 + (r/100)]^{n}

A = 12500[1 + (10/100)]^{3}

A = 12500(11/10)^{3}

A = 12500 × (11/10) × (11/10) × (11/10)

A = 12500 × (1331/1000)

A = 12500 × 1.331

A = 16637.50

Compound Interest = A - P

= 16637.50 - 12500

= 4137.50

Since 4500 > 4137.50, Fabina paid more interest than Radha.

Additional Interest paid by Fabina = 4500 – 4137.50 = ₹ 362.50

**☛ Check: **NCERT Solutions for Class 8 Maths Chapter 8

**Video Solution:**

## Fabina borrows ₹ 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?

NCERT Solutions Class 8 Maths Chapter 8 Exercise 8.3 Question 3

**Summary:**

Fabina borrows ₹ 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. Fabina pays more interest and by ₹ 362.50.

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