An agricultural C

When farmer takes loan from agricultural society:

P = Rs. 5000, r = 4, t = 1 and I = ?

As we know,

⇒ I = Rs. 200

When a farmer takes loan from the bank:

P = Rs. 5000, r = 7.4, t = 1 and I = ?

As we know,

⇒ I = Rs. 370

Hence, the money saved by farmer

= Interest(when loan is taken from bank) – Interest(from agricultural society)

⇒ 370 – 200 = Rs. 170

Hence, money saved by farmer = Rs. 270