Question

A man has a Recurring deposit account in a bank for 3 years. The rate of interest is 8% per annum and man gets Rs. 20220 on maturity. The value of the monthly instalment is ___

• A. Rs. 500
• B. Rs. 600
• C. Rs. 700
• D. Rs. 200

Answer 1

The correct option is A

Rs. 500

Given r = 8 %
n = 3 years = 36 months
Let monthly installment be P
Amount deposited = P $\times$ n = 36 P
Interest = $\frac{P\times n(n+1)}{2\times 12}\times \frac{r}{100}$
= $\frac{P\left(36\right)(36+1)}{2\times 12}\times \left(\frac{8}{100}\right)$
= $\frac{111p}{25}$
Maturity value = Amount deposited + Interest
20220 = 36 P + $\frac{111P}{25}$
36P + $\frac{111P}{25}=20220$
900 P + 111 P = 505500
1011 P = 505500
P= Rs. 500