UGC NET Questions (Paper – 1)

A is correct because compound interest at least matches and usually exceeds simple interest for the same principal, rate and time. B correctly gives the annual compounding formula, and C is true since in simple interest interest ∝ rate × time, so halving one and doubling the other keeps the product unchanged. E is also correct because more frequent compounding at a fixed nominal rate increases the effective annual rate. D is false because changing rate and time in that way does not guarantee the same accumulated amount. Therefore, A, B, C and E only are correct.

Option A:
Option A omits E and thus fails to mention the important concept of effective rate increasing with compounding frequency. Although A, B and C are true, the combination is incomplete and so not the best answer.

Option B:
Option B is correct since it gathers all the true statements and excludes D, which wrongly suggests invariance of amount under doubling rate and halving time in compound interest. It matches the standard treatment of interest problems in aptitude tests.

Option C:
Option C wrongly includes D, which misrepresents compound interest behaviour, and omits A, underplaying the comparison between compound and simple interest. Hence it mixes a false statement with an omission.

Option D:
Option D is incorrect as it includes D and discards B and C, thereby accepting the erroneous claim and omitting correct formulas and relationships.

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.