Question
Quantity I: A person invests Rs. 10,000 in a bank at an
interest rate of 5% per annum, compounded annually. What is the total amount in the account after 3 years? Quantity II: Another person invests Rs. 12,000 in a different bank at an interest rate of 4% per annum, compounded annually. What is the total amount in that account after 2 years? Two quantities, Quantity I and Quantity II, are provided. Your task is to solve both quantities and determine the correct relationship between them. Choose the appropriate option.Solution
Quantity I: Total amount after 3 years = P(1 + r/100n)^(nt)Â = 10000(1 + 0.05/1)^(1*3)Â = 10000(1.157625)Â = 11576.25. Quantity II: Total amount after 2 years = P(1 + r/100n)^(nt)Â = 12000(1 + 0.04/1)^(1*2)Â = 12000(1.0816)Â = 12979.20. Answer: A (Quantity I < Quantity II)
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