Question

Suppose for the principal P, rate R% and time 2 years, the simple interest is S

and the compound interest is C. Consider the following possibilities:

a) C > S

b) C = S

c) C < S

Which of the above holds true?​

Answer 1

Answer

Correct option is

B

Either (i) or (ii) is correct

Case 1. C>S

This is possible if interest is compounded quarterly or half-yearly.

Case 2. C=S

This is possible if interest is compounded yearly.

Case 3. C<S

It can not be true because simple interest cannot be greater than compound interest.

Hence, Option B is correct option.

Answer 2

Answer:

The answer will be a) C>S because Compound Interest = Simple Intrest plus Interest calculated on Simple Interest with same rate for same period but Monthly/Quarterly/Half Yearly/ Anually rest.