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Compound Interest

Question 2Sup...

Question

Question 2

Suppose a certain sum doubles in 2 yr at r% rate of simple interest per annum and R% rate of interest per annum compounded annually.
Then,
(a) r < R
(b) R < r
(c) R = r
(d) Cannot be determined

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Solution

If the total amount received after 2 yr is same for both simple interest and compound interest on same principal, then the rate of simple interest is greater than the rate of compound interest.
i.e. R < r
Hence, option (b) is correct.

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Compound Interest

Standard VIII Mathematics

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