Multiple choice

Passage

In the given questions, two quantities are given, one as ‘Quantity 1’ and another as ‘Quantity 2’. You have to determine relationship between two quantities and choose the appropriate option:

Quantity I: Find the simple interest on Rs. 26000 for 2 years at 13 % per annum? Quantity II: Find the compound interest on Rs. 26000 for 2 years at 12 % per annum?

  1. Quantity I> Quantity II

  2. Quantity I< Quantity II

  3. Quantity II ≥ Quantity I

  4. Quantity II ≤ Quantity I

  5. Quantity I = Quantity II or Relation cannot be established
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Quantity I: Simple Interest = (P × R × T) / 100 = (26000 × 13 × 2) / 100 = 260 × 26 = Rs. 6760. Quantity II: Compound Interest = P(1 + R/100)^T - P = 26000(1 + 12/100)² - 26000 = 26000(1.12)² - 26000 = 26000(1.2544) - 26000 = Rs. 6614.40. Since 6760 > 6614.40, Quantity I > Quantity II, so A is correct.

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