Multiple choice

Quantity I: The difference between the rate of CI and rate of depreciation if a person Akash has a sum of INR 5000 which after 3 years at compound interest @20% p.a. becomes a certain amount that is equal to the amount that is the result of 3-year compounded depreciation from INR 16875. \ Quantity II: 20%.

  1. Quantity II > Quantity I

  2. Quantity I ≥ Quantity II

  3. Quantity I > Quantity II

  4. Quantity I ≤ Quantity II

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

Quantity I: CI rate is 20%. Depreciation: 16875 depreciates to 5000 in 3 years. 5000 = 16875(1-r)³, so (1-r)³ = 0.2963, 1-r ≈ 0.667, r ≈ 33.33%. Difference = 33.33% - 20% = 13.33%. Quantity II = 20%. Since 20% > 13.33%, Quantity II > Quantity I. Answer A is correct.

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