Mr. Singh deposited Rs 5500 in a bank which pays 14% interest per year.
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Priyanka has a recurring deposit account of Rs. 1000 per month at 10% per annum. If she gets Rs. 5550 as interest at the time of maturity, find the total time for which the account was held.
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Let the maturity period be n months,
P be the money deposited every month which is Rs.1000
and r be the rate of interest per annum which is 10%.
Now, the interest I received at the end of maturity is calculated by the following formula:
I=P×
24
n(n+1)
×
100
r
We are given I=5500, so
substituting the values, we get
⇒5550=1000×
24
n(n+1)
×
100
10
⇒n(n+1)=
100
5550×24
=1332
⇒n
2
+n−1332=0
⇒n
2
+37n−36n−1332=0
⇒(n−36)(n+37)=0
⇒n=36, −37
Since the maturity period cannot be negative, n=36.
Therefore, the total time for which the account was held was 36 months which is the same as 3 years. So the maturity period was 3 years.