Multiple choice

Passage

Find the correct relationship between given quantities.

An amount of Rs5200 was invested; the initial rate of interest was 8% and increased by 1% after every year. Quantity I- Rs 15865 Quantity II- compound interest after 3 years

  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 relation cannot be established
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Quantity I is given as Rs 15865. Quantity II: Principal = 5200, Year 1 at 8% = 416, Year 2 at 9% = (5200+416)×0.09 = 505.44, Year 3 at 10% = (5200+416+505.44)×0.10 = 612.14. Compound Interest = 416 + 505.44 + 612.14 = 1533.58. Since 15865 > 1533.58, Quantity I > Quantity II, making option A correct.

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