In the following question, three short paragraphs about personal finance are given in jumbled order. Find the correct sequence of the paragraphs so that they form a coherent passage about the power of compounding and the importance of starting investments early.

Difficulty: Medium

Correct Answer: CAB

Explanation:


Introduction / Context:
This is a paragraph rearrangement question. You are given three labelled paragraphs A, B and C that all deal with the topic of savings, investing, and the power of compounding. Your task is to decide in which order they should appear to form a clear, logical and persuasive passage. The paragraphs each focus on different aspects of the same theme: the need to start investing early, how compounding works, and numerical examples comparing early and late investing.



Given Data / Assumptions:

  • Paragraph C introduces the idea that adult life requires early saving and investing, and mentions the “magic of compounding”.
  • Paragraph A explains how compounding works through a simple example with ₹100 and a 10 percent return.
  • Paragraph B provides detailed numbers comparing starting at age 25 with ₹3,000 per month versus starting at age 35 with ₹6,000 per month.
  • The options give different orders of these three paragraphs: BAC, CAB, BCA, ABC.


Concept / Approach:
A coherent explanation usually begins with a general motivation or question, then explains the underlying concept, and finally offers numerical evidence or illustration. Here, C acts as the hook and motivation, asking why one should not delay investing and introducing compounding. A then clarifies how compounding actually works, using a simple year by year example. B finally gives a more detailed and realistic scenario with monthly investments and ages to demonstrate the long term benefit of starting early. Therefore, the most natural order is C (introduction and motivation), A (concept explanation), B (numerical illustration).



Step-by-Step Solution:
Step 1: Read paragraph C. It opens with "Adulting cannot wait when it comes to savings and investing" and asks "Why you may ask?". This is clearly an introductory and motivational paragraph.Step 2: Notice that C introduces the "magic of compounding" but does not explain how compounding actually works. That explanation is promised but not yet given.Step 3: Read paragraph A. It immediately explains the power of compounding through a simple example with ₹100 and a 10 percent return, and how reinvesting interest makes money grow faster. This naturally follows the introduction in C.Step 4: Read paragraph B. It starts with "To get a perspective, let us turn to some numbers", then compares starting at age 25 versus 35 with different monthly contributions. This sounds like a deeper illustration after the concept is clear.Step 5: Put them together: C (why you should start early and what compounding is), A (how compounding works in principle), B (detailed numerical comparison). This order is CAB, which is listed as option B.


Verification / Alternative check:
Test another option, for example ABC. If you start with A, the passage would open with a technical explanation about reinvesting ₹100. There is no introductory context about why the reader should care. Ending with C would then suddenly jump back to general advice about adulting and starting early, which feels like a delayed introduction rather than a conclusion. Similarly, BAC would start with detailed numbers (B) before the concept is even defined, confusing readers who have not yet been told what compounding is.



Why Other Options Are Wrong:
Any sequence that does not begin with C ignores the fact that C poses the central question and introduces the main concept and motivation. Placing B before A (as in BCA) forces the reader to read complex numbers before they understand compounding, which breaks logical flow. Ending with C leaves the passage without a strong numerical conclusion, while ending with B draws the reader to a practical takeaway.



Common Pitfalls:
Many candidates are tempted to start with the paragraph that contains numbers, thinking that concrete details always come first. However, good expository writing usually introduces the topic and concept before diving into numerical detail. A useful strategy is to look for introductory signals like questions ("Why you may ask?") and phrases like "To get a perspective", which often indicate transitions rather than openings.



Final Answer:
The correct logical order of the paragraphs is C A B, so option B (CAB) is correct.


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