Karan and shashank borrowd rs.6000 each at thr rate of 12%per annum for a period of 2years and 3 years respectively. find the difference of intrest paid by them

12% / 1,200 = .01

Monthly Payment = rate + (rate / {[(1 + rate)^months] -1}) * principal

TWO YEAR LOAN

Monthly Payment = {.01 + {.01 / [(1.01^24)-1]}} * 6,000

Monthly Payment = {.01 + {.01 / (1.2697346485 -1)}} * 6,000

Monthly Payment = {.01 + {.01 / .2697346485}} * 6,000

Monthly Payment = {.01 + {0.0370734722}} * 6,000

Monthly Payment = .0470734722 * 6,000

Monthly Payment = 282.44

Total Loan Cost = 282.44 *24 = 6,778.56

Interest = 778.56

THREE YEAR LOAN

Monthly Payment = {.01 + {.01 / [(1.01^36)-1]}} * 6,000

Monthly Payment = {.01 + {.01 / [(1.4307687836) -1]}} * 6,000

Monthly Payment = {.01 + {0.0232143098}} * 6,000

Monthly Payment = 0.0332143098 * 6,000

Monthly Payment = 199.29

Total Loan Cost = 199.29 * 36 = 7,174.44

Interest = 1,174.44

Difference in Interest = 1,174.44 -778.56 = 395.88

Source: https://www.1728.org/calcloan.htm AND

https://www.1728.org/loanform.htm

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