Multiple choice

Directions: Compare the two quantities in A and B. | Quantity A | Quantity B | | --- | --- | | Simple interest on \$500 @ 10% for 2 years | Compound interest on \$400 @ 10% for 2 years |

  1. Quantity A is greater than quantity B.

  2. Quantity B is greater than quantity A.

  3. Both quantities are equal.

  4. The relationship between the quantities cannot be determined.
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Quantity A: SI = 500 * 0.10 * 2 = 100. Quantity B: CI = 400 * (1 + 0.10)^2 - 400 = 400 * 1.21 - 400 = 484 - 400 = 84. Since 100 > 84, Quantity A is greater.

AI explanation

Using the simple interest formula for Quantity A, we calculate 500 multiplied by 10 multiplied by 2 divided by 100, which equals 100. For Quantity B, the compound interest is found by calculating the amount as 400 multiplied by 1.1 squared, giving 484, making the interest 84. Since 100 is greater than 84, Quantity A is greater.

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