Question

Katrina opened a recurring deposit account with a nationalised bank for a period of 2 years.if the bank pays interest at the rate of 6% p.a . and the monthly installment is rs 1000,find the interest in 2 years and maturity value

Answer 1

Answer:

The amount of interest is rupees 1500 and the maturity value is rupees 25500.

Step-by-step explanation:

The formula of interest for recurring deposit is

$I=\frac{P\times n(n+1)r}{2400}$

Where, P is monthly installment, n is number of months, r is rate of interest in percent.

From the given information it is clear that monthly installment is rs 1000, interest at the rate of 6% p.a  and number of months is 24.

$I=\frac{1000\times 24(24+1)6}{2400}$

$I=\frac{1000\times 24(25)6}{2400}$

$I=1500$

The amount of interest is rupees 1500.

The maturity value is

$A=P\times n+I$

$A=1000\times 24+1500$

$A=24000+1500$

$A=25500$

Therefore the maturity value is rupees 25500.

Answer 2

Given :

• Monthly deposits P = Rs 1000
• rate = 6%
• time = 2 year = 24 months

To find :

• (i) the interest in 2 years
• (ii) the amount of maturity.

Solution :

i) interest = [p x n (n + 1)r]/100 .........(formula)

= [p x n (n + 1)]/(2 x 12) x r/100

= 1000 x 24(24 - 1)/(2 x 12) x 6/100

= Rs 1500

ii) Maturity value = P x n + interest ..(formula)

= Rs(1000 x 24 + 1500)

= Rs 25500

=> The interest in 2 years is 1500 Rs and maturity value is Rs 25500