Question

Directions: In the following question, two statements are numbered as Quantity I and Quantity II. On solving these statements, we get quantities I and II respectively. Solve both quantities and choose the correct option.

Quantity I: Find the amount on compound interest on a sum of Rs.625000 at the rate of 25% per annum after three years.

Quantity II: Find the simple interest on a sum of Rs.10000 at the rate 15% per annum after 5 years.
1. Quantity 1 > Quantity 2
2. Quantity 1 ≥ Quantity 2
3. Quantity 1 < Quantity 2
4. Quantity 1 ≤ Quantity 2
5. Quantity 1 = Quantity 2

Answer 1

Correct Answer - Option 1 : Quantity 1 > Quantity 2

Given:

P for CI = Rs. 625,000

R = 25%

T = 3

P for SI = 10,000

R = 15%

T = 5

Formula used:

SI = P × R × T / 100

CI : A = P (1 + (r/100))^t

P = Principal amount, R = Rate of interest, T = time period

Calculation:

Quantity I:

P for CI = Rs. 625,000

R = 25%

T = 3

⇒ A = 625000 × (1 + (25/100))³

⇒ A = 625000 × 125 × 125 × 125 / (100 × 100 × 100)

⇒ A ≈ 122,070

Quantity II:

P for SI = 10,000

R = 15%

T = 5

⇒ Required SI = 10000 × 15 × 5 / 100

⇒ Required SI = 7500

∴ Quantity I > Quantity II