Suppose for the principal P, rate R% and time T, the simple interest is S and compound interest is C. Consider the possibilities.
(i) C > S
(ii) C = S
(iii) C < S Then:
(a) only (i) is correct. (b) either (i) or (ii) is correct. (c) either (ii) or (iii) is correct. (d) only (iii) is correct.
Show solutionHide solution
(a) only (i) is correct.
Explanation: Let Principal, P = Rs. 100, Rate = 10% and Time = 1 year
Simple interest (SI)= (P×R×T)/100 = (100×10×1)/100 = Rs.10
Since, Amount = P(1+R/100)T=100(1+10/100)1= 100(11/10) = Rs. 110
Compound interest (CI) = Amount – Principal = 110 -100 = 10
So, CI>SI