Compound Interest

Step 1: Apply the compound interest formula for different rates
Amount after first year: Amount after second year: Amount after third year: Step 2: Compute Compound Interest
Thus, the correct answer is Rs. 5,410.

Step 1: Compute Simple Interest
Step 2: Compute Compound Interest
Step 3: Compute Extra Return
Thus, the correct answer is Rs. .

Step 1: Identify the given values
Principal , Rate per annum, Time years.
Step 2: Apply the Compound Interest formula
The formula for compound interest is:
Substituting the values:
Step 3: Calculate the compound interest
Compound Interest is given by:
Thus, the correct answer is Rs. 3,300.

Step 1: Understanding the relationship between Simple and Compound Interest
- Compound Interest (CI) is generally greater than Simple Interest (SI) when the interest is compounded annually or more frequently. That is, .
- If the time period is very small (e.g., one year) or the rate is extremely low, CI and SI can be approximately equal, i.e., .
- However, is never less than in normal circumstances.
Step 2: Evaluating the given statements
- Statement (i) is generally true for most cases.
- Statement (ii) is possible when the time period is very short or for extremely low interest rates.
- Statement (iii) is incorrect because CI is always equal to or greater than SI.
Thus, either (i) or (ii) is correct.