Multiple choice

Each question below contains a statement followed by Quantity I and Quantity II. Find both to find the relationship among them. Mark your answer accordingly. The principal amount is Rs 12,000 Quantity I: Simple Interest on the sum at the rate of 10% per annum for 2 years Quantity II: Compound Interest on the sum at rate of 10% compounded semi-annually for one and a half year.

  1. Quantity I > Quantity II

  2. Quantity I ≥ Quantity II

  3. Quantity II > Quantity I

  4. Quantity II ≥ Quantity I

  5. Quantity I = Quantity II or Relation cannot be established
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Quantity I (SI): 12000 × 0.10 × 2 = Rs 2400. Quantity II (CI): 10% semi-annually means 5% per half-year; 1.5 years = 3 periods; CI = 12000 × (1.05)³ - 12000 = Rs 1891.50. Since 2400 > 1891.50, Quantity I > Quantity II.

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