Multiple choice

Given below are two quantities named I and II. Based on the given data, you have to determine the relation between them and mark the answer. Quantity I- a sum of money Rs 6000 lent on compound interest becomes double after 4 years. After 16 years the sum becomes. Quantity II- the simple interest on a certain amount for 5 years at 4% pa is 1/4th of compound interest on Rs 5500 for a year at 10% pa the difference between sum placed in compound interest and sum placed in simple interest is

  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 relation can not be established
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Quantity I: Sum doubles in 4 years, so after 16 years (4 doublings), it becomes 6000 × 2^4 = Rs 96,000. Quantity II: CI on Rs 5500 at 10% for 1 year = 5500 × 0.1 = Rs 550. SI is 1/4 of this = Rs 137.50. SI amount for 5 years at 4% gives principal = 137.50 × 100/(5×4) = Rs 687.50. Difference = 5500 - 687.50 = Rs 4,812.50. Clearly 96,000 > 4,812.50, so Quantity I > Quantity II.

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