Question

ram opened a recurring deposit account with a nationalised bank he deposited rs1000 per month for 2 years at the time of maturity he received 25500 find 1) interest earned in two years 2) rate of interest per annum
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Answer 1

Given :

Ram opened a recurring deposit of 1000 Rs. per month for 2 years and received Rs. 25,500 at the time of maturity.

To Find :

Interest earned in 2 years and the rate of interest per annum.

Solution :

1)  He was investing money per month for 2 years = 1000 Rs.

2 years = 12 × 2 = 24 months

Total Principal amount  = 1000 × 24 = 24,000

Interest = Maturity amount - Principal amount

= 25,500 - 24,000

= 1,500 Rs.

2) To find Interest we use the formula :

$Interest=P\times \frac{n(n+1)}{2}\times \frac{r}{12\times 100}$

P = Monthly payment (1,000)

n = time in months (24)

r = rate of interest

Now put the values in to formula

$1,500=1000\times \frac{24(24+1)}{2}\times \frac{r}{12\times 100}$

$1,500=1000\times \frac{600}{2}\times \frac{r}{1200}$

$1,500=250r$

$\frac{1500}{250}=\frac{250r}{250}$

r = 6%

Rate of interest per annum would be 6%.