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 I: If the S.I. on a sum of money for 2 years at 10% per annum is Rs.100, what is the C.I. on the same sum of money at the same rate and for the same time period? Quantity II: What principal will be amount to Rs.48250 at compound interest in 2 years, the rate of interest for 1st & 2nd year being 6% and 8% respectively?

  1. Quantity I > Quantity II

  2. Quantity I ≥ Quantity II

  3. Quantity I < Quantity II

  4. Quantity I ≤ Quantity II

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

Quantity I: SI = P × R × T / 100. 100 = P × 10 × 2 / 100. P = 500. CI = P(1 + R/100)^T - P = 500(1.1)^2 - 500 = 500(1.21) - 500 = 605 - 500 = 105. Quantity II: Principal P. After year 1 at 6%: P × 1.06. After year 2 at 8%: P × 1.06 × 1.08 = P × 1.1448 = 48250. P = 48250 / 1.1448 = 42147. Since 105 < 42147, Quantity I < Quantity II.

Keep practicing — related questions