Multiple choice

Find the value of quantities and state the correct relationship. Quantity I: The difference between SI and CI compounded annually on a certain sum of money for 2 years at 8% per annum is Rs. 12.80. Find the principal. Quantity II: A sum fetched a total simple interest of Rs. 800 at the rate of 8% per annum in 5 years. What is the sum?

  1. Quantity I > Quantity II

  2. Quantity I < Quantity II

  3. Quantity I ≥ Quantity II

  4. Quantity I ≤ Quantity II

  5. Quantity I = Quantity II or no relation can be established
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Quantity I: Difference between CI and SI for 2 years = P × (r/100)^2. 12.80 = P × (8/100)^2. P = 12.80 × 10000/64 = Rs. 2000. Quantity II: SI = P × r × t / 100. 800 = P × 8 × 5 / 100. P = 800 × 100 / 40 = Rs. 2000. Both quantities equal Rs. 2000, so they are equal.

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