Multiple choice

In each of the following questions, read the given statement and compare the Quantity I and Quantity II on its basis. Quantity I: Find the amount on compound interest on a sum of Rs.5000 at the rate of 15% per annum after two years. Quantity II: Find the simple interest on a sum of Rs. 6000 at the rate 25% per annum after 1.5 years.

  1. Quantity : I > Quantity : II

  2. Quantity : I ≥ Quantity : II

  3. Quantity : I < Quantity : II

  4. Quantity : II ≥ Quantity : I

  5. Quantity I = Quantity II or relation can't be established
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Quantity I: CI on Rs.5000 at 15% for 2 years = 5000[(1 + 0.15)² - 1] = 5000(1.3225 - 1) = 5000(0.3225) = Rs.1612.50. Quantity II: SI on Rs.6000 at 25% for 1.5 years = 6000 × 0.25 × 1.5 = Rs.2250. Since 1612.50 < 2250, Quantity I < Quantity II.

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