Multiple choice

Directions: In the following question, you have to find out which of the following statements is/are redundant for determining the answer of the given question or can be dispensed with. What is the total compound interest earned at the end of 5 years? I. Simple interest earned on that amount at the same rate for the same period is Rs. 6,000. II. The rate of interest is 10% p.a. III. Compound interest for 5 years is more than the simple interest for that period by Rs. 515.

  1. Only II and III

  2. Only II and either I or III

  3. Only I and II

  4. I, II, or III

  5. All I, II and III
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

To calculate compound interest, you need the principal, rate, and time. Statement I gives SI, which allows finding the principal if the rate is known. Statement II gives the rate. Statement III gives the difference between CI and SI. Any combination of two of these is sufficient to find the CI.

AI explanation

To find compound interest, you need the principal, the rate, and the time. Statement I gives the simple interest, which equals principal times rate times time divided by 100; since the time is 5 years, this provides the product of principal and rate. Statement II gives the rate, so using I and II you can find the principal and calculate the compound interest. Statement III gives the difference between compound and simple interest, so using I and III you can find the compound interest directly without the rate, meaning II is not needed if you have I and III. Similarly, if you have II and III, you can deduce the simple interest and principal, meaning I is not needed. Therefore, you only need two of the statements, so any one of the statements I, II, or III can be dispensed with.

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