Multiple choice

An amount of money was lent for $3$ years. what will be the difference between the simple and the compound interest earned on it at the same rate? P : The rate of interest was $8\%$per annum. Q : The total amount of simple interest was Rs.$1200$

  1. Only P is sufficient to answer

  2. Only Q is sufficient to answer

  3. Both P & Q are sufficient to answer

  4. None of the above.
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

To find the difference between simple and compound interest for 3 years, you need the principal (P), the rate (R), and the time (T). Statement P provides the rate, and Statement Q provides the total simple interest, which allows calculating the principal. Both are necessary to determine the specific interest difference.

AI explanation

To find the difference between simple and compound interest for three years, we use the formula Difference = P x (R/100)^2 x (3 + R/100). Statement P provides the rate of 8 percent, and statement Q provides the simple interest of 1200 rupees. Using simple interest formula 1200 = (P x 8 x 3)/100, we find the principal P is 5000 rupees. With both principal and rate known, we can calculate the exact difference; therefore, both statements together are sufficient.

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