Question

Chen and Hermione took a loan of $\$4000$ each at 15% per annum for $3\frac{1}{2}$ years and 5 years respectively. Then, the difference in the interest paid by them is (in dollars)

• A. 900

Answer 1

The correct option is A 900
We know $SI=\frac{P\times R\times T}{100}$

$\Rightarrow SI=\frac{4000\times 15\times T}{100}$

$\Rightarrow SI=40\times 15\times T$

Chen:
$SI=40\times 15\times 3.5=\$2100$
Hermione:
$SI=40\times 15\times 5=\$3000$
Difference in interest:
$=\$3000-\$2100=\$900$