Mathematics
If the number of conversion periods ≥ 2, then the compound interest is
less than simple interest
equal to simple interest
greater than or equal to simple interest
greater than simple interest
Answer
When the number of conversion periods ≥ 2, then the compound interest is greater than simple interest.
As, in compound interest the interest is always calculated on the compounded principal whereas in simple interest, the interest is calculated on the initial principle so for conversion periods ≥ 2 compound interest will be greater than simple interest.
Hence, Option 4 is the correct option.
Related Questions
Mr. Rao bought 1-year, ₹10000 certificate of deposit that paid interest at an annual rate of 8% compounded semi-annually. The interest received by him on maturity is
₹816
₹864
₹800
₹10816
The present population of a city is 12,00,000. If it increases at the rate of 8% every year then the population of the city after 2 years is
199680
1399680
1500000
1299680
Consider the following two statements.
Statement 1: A sum of ₹ 1,000 invested at 10% p.a. rate of interest will earn ₹ 100 interest in first year.
Statement 2: Simple and compound interest is the same for first conversion period at the same rate of interest.
Which of the following is valid?
Both the statements are true.
Both the statements are false.
Statement 1 is true, and Statement 2 is false.
Statement 1 is false, and Statement 2 is true.