Simple and compound interest concepts – UGC NET Question

Statements A, B, C and D together give a complete and correct conceptual comparison of simple and compound interest in exam-type settings. A is correct for positive rates and more than one year because compounding on accumulated amounts cannot yield less than simple interest on principal. B and C correctly distinguish the bases on which interest is calculated in the two regimes, and D accurately contrasts the linear versus exponential-type growth patterns. Statement E is false because for exactly one year simple and compound interest coincide, so simple interest is not greater, and hence the correct combination must include A, B, C and D but exclude E.

Option A:
Option A is correct because it captures all of the true statements and omits E, which misstates the one-year comparison between simple and compound interest. It recognises that compounding over multiple periods increases or at least matches simple interest and that the two schemes use different bases for interest calculation. It also correctly reflects the different shapes of the time–amount graphs.

Option B:
Option B is incorrect because it leaves out D, the key statement about linear versus exponential-like growth, so the description of time behaviour is incomplete. Although A, B and C are true, this combination does not fully convey how amounts diverge over longer periods. For conceptual NET questions, missing such a central point makes the option inadequate.

Option C:
Option C is wrong because it includes E along with otherwise correct statements; E wrongly claims that simple interest is always greater than compound interest for one year. Including even one false statement makes the whole set incorrect in a “select correct statements” question. Therefore this combination cannot be accepted as correct.

Option D:
Option D is incorrect because it omits A and D while still containing E, the false statement. By dropping A it loses the general comparison between the two interest types, and by adding E it introduces an error about the one-year case. This mixture of omission and error makes the option invalid.