Multiple choice

Directions: In the following item, Quantity I and Quantity II are given. Determine the relationship between the quantities and choose the appropriate option. Quantity I: Compound interest on Rs. 5,000 at 10% per annum for 1 year Quantity II: Compound interest on Rs. 4,500 at 12% per annum for 1 year

  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 No relation
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Quantity I is 5000 * 0.10 = 500. Quantity II is 4500 * 0.12 = 540. Since 500 < 540, Quantity I is less than Quantity II.

AI explanation

When compound interest is compounded annually, the interest for 1 year equals the principal multiplied by the rate. For Quantity I, the interest is 5000 * 0.10 = 500. For Quantity II, the interest is 4500 * 0.12 = 540. Since 500 is less than 540, Quantity I < Quantity II.

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