Question
Quantity I: What will be the difference between
compound interest and simple interest for 4 years on a principal of Rs.20480 at the rate of 25% per annum? Quantity II: Rs 8079 In the question, two quantities I and II are given. You have to solve both the quantities to establish the correct relation between Quantity I and Quantity II and choose the correct option.Solution
Quantity I: S.I = 25 × 4 = 100% of 20480 S.I = Rs.20480 For C.I, 25% = 1/4 P = 4, A = 5 P for 4 years = 44 = 256 ratio A for 4 years = 54 = 625 ratio Interest = 625 - 256 = 369 ratio => 256 ratio = 20480 ∴ 369 ratio = (20480/256) × 369 = Rs.29520 Required difference = Rs.9040 Quantity II: Rs.8079 Hence, Quantity I > Quantity II
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