Simple & Compound Interest (Group 3)

Question 1:
You want to take a loan from Bank ABC, which offers 2 simple interest loan schemes (@ \(6\%\) per annum).

• Loan Scheme M: calculated annually
• Loan Scheme N: calculated monthly

Which simple interest loan scheme (M or N) has a lower interest or are they the same?
Explain how you arrive at your answer.


Question 2:
You want to take a loan from Bank XYZ, which offers 2 compound interest loan schemes (@ \(6\%\) per annum).

• Loan Scheme P: calculated annually
• Loan Scheme Q: calculated monthly

Which compound interest loan scheme (P or Q) has a lower interest or are they the same?
Explain how you arrive at your answer.