1.

Given below are two statementsStatement I: Compound interest involves the reinvestment of the earned interest, which in future years also earns interestStatement II:  Simple interest is the amount earned or paid on a sum of compound interest and principal amountIn light of the above statement, choose the most appropriate answer from the option given below1. Both statement I and statement II are true2. Both statement I and statement II are false3. Statement I is correct but statement II is false4. Statement I is incorrect but statement II is true

Answer» Correct Answer - Option 3 : Statement I is correct but statement II is false

Concept used:

In the case of the compound interest, Interest is earned on the interest every year.

And, In case of simple interest, Interest is only earned on the principal only and interest is the same in every year.

Calculation:

From the above statement we come to know that Statement I is correct and Statement II is wrong

∴ The correct answer is option 3



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