Question

David deposited ₹300 per month in a recurring deposit account. If he gets ₹7725 at the end of two years on maturity, find the rate of interest (in %) on recurring deposit.

• A. 7

Answer 1

The correct option is A 7

Installment per month(P) = ₹300

Number of months(n) = 24

Let rate of interest(r)= r% p.a.

$I=P\times \frac{n(n+1)}{2\times 12}\times \frac{r}{100}$
$=300\times \frac{24(24+1)}{2\times 12}\times \frac{r}{100}$
$=300\times \frac{600}{24}\times \frac{r}{100}=₹75r$

Maturity value= ₹ (300 x24)+₹ (75)r

Given maturity value= ₹7,725

Then ₹ (300 x24)+₹ (75)r = ₹7,725

75 r = ₹7,725 - ₹7,200

r = $\frac{525}{75}$ = 7%