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      Question

      Quantity I: A person invested Rs. 20,000 in a scheme

      offering 10% per annum simple interest. After two years, he reinvested the amount and interest earned at a compound interest rate of 8% per annum for another two years. Find the total amount after four years. Quantity II: A sum of Rs. 18,000 is invested in a scheme that offers 15% compound interest, compounded annually, for three years. Find the amount after three years.
      A Quantity I < Quantity II Correct Answer Incorrect Answer
      B Quantity I ≥ Quantity II Correct Answer Incorrect Answer
      C Quantity I ≤ Quantity II Correct Answer Incorrect Answer
      D Quantity I = Quantity II Correct Answer Incorrect Answer
      E Quantity I > Quantity II Correct Answer Incorrect Answer

      Solution

      Solution: Quantity I: Simple interest for two years = 20000 * 10% * 2 = Rs. 4000 Amount after two years = 20000 + 4000 = Rs. 24000 Now, this Rs. 24000 is invested at 8% compound interest for two years. Amount after two years at 8% compound interest = 24000 * (1 + 8/100)^2 = 24000 * 1.08^2 = 24000 * 1.1664 = Rs. 27993.6 Quantity II: Amount after three years at 15% compound interest = 18000 * (1 + 15/100)^3 = 18000 * 1.15^3 = 18000 * 1.520875 = Rs. 27375.75 Answer: E (Quantity I > Quantity II)

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