Question

Vicky had a recurring deposit account in a bank. He deposited rupees 2500 per month for some months. If he got rupees 66250 at the time of maturity, find the duration of deposit, the rate of interest being 10% p.a.

Answer 1

Answer:

30 months.

Step-by-step explanation:

Monthly deposit = ₹ 2,500

Interest rate = 10% pa = 10/12 % pm

Future value = ₹ 66,250

66250 = 2500(P/A,10/12%,n)

=> (P/A,10/12%,n) = 66,250/2500 = 26.5

$\frac{1 - 1.00833^{ - n} }{0.00833} = 26.5$

$1 - {1.00833}^{ - n} = 26.5 \times 0.00833$

$1 - {1.00833}^{ - n} = 0.2208333$

$1.00833 ^{ -n } = 0.779166$

${1.00833}^{n} = 1.2834$

Taking log on both sides we get,

$n \times log(1.00833) = log(1.2834)$

on solving we get

n = 30 months