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
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. Both statement I and II are correct.
SI = (P × R × T)/100 = (6000 × 10 × 2)/100 = 1200
Statement I is correct.
CI = P[(1 + R/100)n - 1]
= 6000[(1 + 10/100)2 - 1]
= 6000(121/100 - 1)
= 6000(21/100)
= 1260
Statement II is correct.