Multiple choice

In the following questions, two equations Quantity I and Quantity II are given. You have to solve both the equations and give answer. Quantity 1: Amount after 6 years, at the rate of 15% simple interest. When the principle amount is 12000 rupees. Quantity 2: Amount after 4 years, if 12,000 rupees becomes 14,000 in two years at compound interest.

  1. Quantity 1 > Quantity 2

  2. Quantity 1 ≥ Quantity 2

  3. Quantity 2 > Quantity 1

  4. Quantity 2 ≥ Quantity 1

  5. Quantity 2 = Quantity 1 or relation cannot be established
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A Correct answer
Explanation

Quantity 1: SI = P × R × T / 100 = 12000 × 15 × 6 / 100 = Rs. 10800. Amount = 12000 + 10800 = Rs. 22800. Quantity 2: Rs. 12000 becomes Rs. 14000 in 2 years at CI. In next 2 years, this amount grows at same rate: 14000 × (14000/12000)^2 = 14000 × (7/6)^2 = Rs. 16333. Since 22800 > 16333, Quantity 1 > Quantity 2.

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