Question

The maturity value of a Recurring deposit account is Rs.11364 in 4 years. If the monthly deposit is Rs.200. Find the rate of interest.
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Answer 1

Answer:

Explanation:

Hope it helps you

Answer 2

Given information to us:

• Maturity value of a Recurring deposit account = Rs.11364
• Time taken = 4 years
• Monthly deposit = Rs.200

Need to be calculated:

• Rate of interest

Required Calculations:

Here we have been provided with the values of time taken, maturity value and monthly deposit.

Monthly deposit is the principal (P).

➳ P = Rs.200

Let's convert the time which is in years into months.

We know that,

➳ 1 year = 12 months

➳ 4 years = 12 × 4 = 48 months

Let us assume,

➳ Rate of interest be x

Using the formula for Maturity value (M.V):-

➳ M.V. = ( P × n ) + [ P × n (n+1) / (2×12) ] × ( r / 100 )

Where,

• P denotes Principal
• n denotes number of months
• r denotes Rate of interest

Substituting the required values,

➳ M.V. = (200×48) + (200×48×49 / 2×12 ) × (x/ 100)

Solving now,

➳ M.V. = (9600) + (100×48×49 / 12) × (x/100)

➳ M.V. = (9600) + (100×24×49 / 6) × (x/100)

➳ M.V. = (9600) + (100×12×49 / 3) × (x/100)

➳ M.V. = (9600) + (100×4×49) × (x/100)

➳ M.V. = (9600) + (4×49) × (x)

➳ M.V. = (9600) + (196) × (x)

➳ M.V. = (9600) + (196x)

As M.V. is Rs.11364. Substituting the value,

➳ 11364 = (9600) + (196x)

Now,

➳ 196x = 11364 - 9600

➳ 196x = 1764

➳ x = 1764 / 196

➳ x = 882 / 98

➳ x = 441 / 49

➳ x = 63 / 7

➳ x = 9

Conclusion:

• Rate of interest is 9%