Multiple choice

Directions: In these questions, two quantities numbered I and II are given. You have to solve both the quantities and give answer Quantity I: Sita invested Rs. 32000 on compound interest at 20% per annum for two years. What will be interest earned after two years? Quantity II: Ritika invested Rs. 39000 on simple interest at 18% per annum for two years. What will be the interest earned after two years?

  1. Quantity I < Quantity II

  2. Quantity I ≥ Quantity II

  3. Quantity I > Quantity II

  4. Quantity I = Quantity II or relationship cannot be established

  5. Quantity I ≤ Quantity II
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Quantity I: Compound interest on 32000 at 20% for 2 years = 32000 * (1.2^2 - 1) = 32000 * 0.44 = 14080. Quantity II: Simple interest on 39000 at 18% for 2 years = 39000 * 0.18 * 2 = 14040. Since 14080 > 14040, Quantity I > Quantity II.

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