Rs. 6000 is lent at the annual rate of 10 percent for 2 years. Which of the following is statement(s) is/are correct?
I. Simple interest to be received on this sum is Rs. 1200
II. Compound Interest (compounding annually) to be received on this sum is Rs. 1260
Answer & explanation
Correct answer: option 2
I.
Simple at the rate of 10% per annum for 2 years = 10% + 10% = 20%
SI = \(\frac{P×R×T}{100}\)
= \(\frac{6000×10×2}{100}\)
= 1200
Statement I is correct.
II.
Compound interest at rate of 10% p.a. for 2 years = 10 + 10 + \(\frac{10×10}{100}\)
= 20 + 1
= 21%
CI = 6000 × 21% = 1260
Statement II is correct.
Ans :- Both statement I and II are correct