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Quantity A: At what rate of interest will the simple interest on a sum of money be 30% of the principal after 4 years? Quantity B: At what rate of simple interest will a sum of money amount to 1.5 times itself in 8 years? Compare Quantity A and Quantity B.

1. Quantity A > Quantity B
2. Quantity A < Quantity B
3. Quantity A ≥ Quantity B
4. Quantity A ≤ Quantity B

Correct answer: Quantity A > Quantity B

Solution

For Quantity A, SI is 30% of principal in 4 years, so $\frac{PR}{100}\cdot 4 = 0.3P$, giving $R=7.5\%$. For Quantity B, amount becomes 1.5 times in 8 years, so SI is 50% of principal, giving $R=6.25\%$. Therefore, Quantity A is greater than Quantity B.

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