Question

Tarun opened a recurring deposit account in a bank. He deposits Rs 800 per month for 1 year. Find the amount payable to him at the time of maturity if the rate of interest 10% per annum

Answer 1

Here, P= money deposited per month = Rs. 800

n= Time for which the money is deposited =1

2

1

years =18 months.

Let the rate of interest be r% per annum, then

Interest =P×

2×12

n(n+1)

×

100

r

=800×

2×12

18×19

×

100

r

= Rs. 114r

Total money deposited =18×800= Rs. 14,400

Since money deposited + interest = Maturity value

⇒14,400+114r=15,084

⇒114r=15,084−14,400

⇒114r=684

⇒r=

114

684

=6

Hence, rate of interest =6% p.a.