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Question

Which of the following statements is true? (Rate of interest = R% per annum)



A

In simple interest the principal changes every year.

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B

In compound interest the principal is fixed every year.

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C

In compound interest the principal changes every year.

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D

Both compound interest and simple always have the same principal every year.

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Solution

The correct option is C

In compound interest the principal changes every year.


In simple interest the principal doesn’t change yearly while in compound interest it does change yearly.


Mathematics

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