Question

Suppose for the principal $P$, rate $R\%$ and time $T$ years the simple interest is $S$ and compound interest is $C$. Consider the possibilities :
(i) $C>S$ (ii) $C=S$ (iii) $C<S$
Which of the following options hold?

• A. Only (i) is correct.
• B. Either (i) or (ii) is correct
• C. Either (ii) or (iii) is correct
• D. Only (iii) is correct.

Answer 1

The 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.