Multiple choice

Find the amount at the end of 3 years and 6 months- Statement I: If a principal is invested at the same rate of simple interest for 3 years it becomes 3 times. Statement II: The principal produces a compound interest of 1700 if invested at the same rate of interest for 2 years. Statement III: Any principal invested at the same rate of compound interest becomes 126.5625% at the end of 2 years.

  1. I and either II or III

  2. Any two

  3. II and either I or III

  4. II and III

  5. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Statement I: Principal becomes 3P in 3 years at SI, so rate r = 2P/3P = 2/3 per year. Statement II: CI for 2 years is 1700, so P(1+r)² - P = 1700. Statement III: P becomes 126.5625% of P after 2 years, so (1+r)² = 1.265625, giving r = 12.5%. II or III with I gives both r and P. From I, r = 2/3. Using r in II or III gives P. Then calculate amount at 3.5 years.

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