Question

Akshay has a recurring deposit account in a bank for 5 years at 9 percent p.a. simple interest. If he gets Rs.51607.50 at the time of maturity, find the monthly instalment.

Answer 1

The monthly installment is Rs. 700.

Step-by-step explanation:

Let us assume that the monthly installment was Rs. x.

So, the first month's installment will get interest for 60 months at the monthly interest of $\frac{9}{12} = 0.75$ % per month.

Similarly, the second installment of Rs. x will get interest for 59 months at the interest rate of 0.75% per month.

So, in that way, the total sum will be

 $x(1 + \frac{0.75 \times 60}{100}) + x(1 + \frac{0.75 \times 59}{100}) + x(1 + \frac{0.75 \times 58}{100}) + ............. + x(1 + \frac{0.75 \times 1}{100}) = 51607.5$

⇒ 60x + 0.0075x(60 + 59 + 58 + 57 + ........... + 1) = 51607.5

⇒ 60x + 0.0075x (0.5)(60)(60 + 1) = 51607.5

⇒ 73.725x = 51607.5

⇒ x = 700

Therefore, the monthly installment is Rs. 700. (Answer)