Multiple choice

The question given below contain two statements giving certain data. You have to decide whether the data given in the statements are sufficient for answering the question ? What is the difference between the simple interest and compound interest on a certain amount? I. Rate of interest is 5% per annum. II. The interest at the end of 5 years is Rs. 1250.

  1. If statement I alone is sufficient but statement II alone is not sufficient.

  2. If statement II alone is sufficient but statement I alone is not sufficient.

  3. If each statement alone (either I or II) is sufficient.

  4. If statement I and II together are not sufficient.

  5. If both statement together are sufficient, but neither statement alone is sufficient.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

To find the difference between simple interest (SI) and compound interest (CI), we need the principal amount (P), rate (R), and time (T). Statement I gives rate = 5%. Statement II gives interest = Rs. 1250 after 5 years, but doesn't specify whether this is SI or CI, and doesn't give the principal. Even together, we cannot determine the principal uniquely because we don't know which type of interest the Rs. 1250 represents. Both statements together are insufficient.

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