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Answer :
We have given data for Fabina as: P = ₹ 12,500, R = 12% p.a. and n = 3 years
So, SI for 4 months =\(\frac{P \times R \times n}{100\times 12}\)
=\(\frac{12,500\times 12 \times 3}{100}\)
=\(₹ 4500 \)
Therefore we have, CI=A - P
=\(P(1+\frac{R}{100})^n\)-P
=\(12,500(1+\frac{10}{100})^3\)-12,500
=\(12,500(\frac{11}{10})^3\)-12,500
=\(12,500\times (\frac{10}{100}\times \frac{10}{100}\times \frac{10}{100})\)-12,500
=\(12,500\times (\frac{1331}{1000})\)-12,500
=\(12,500 \times (\frac{1331}{1000}-1)\)
=\(12,500 \times (\frac{1331-1000}{1000})\)
=\(12,500 \times (\frac{331}{1000})\)
=\(12.5\times 331 = ₹ 4137.50 \)
So, the difference between the two interests = ₹ 4500 – ₹ 4137.50 = ₹ 362.50
Hence, Fabina pays more interest by ₹ 362.50.