Question

Deva opened a recurring deposit account in a bank and deposited Rs. $500$ per month for two years. If he received Rs. $19725$ at the time of maturity, find the rate of interest per annum.

• A. $19.33\%$
• B. $29.33\%$
• C. $44.99\%$
• D. $61.8\%$

Answer 1

The correct option is D $61.8\%$

Let the rate of interest per annum be $r\%$
Given, $P=$ Rs. $500,n=2\times 12=24$ months
Interest $=$ $\frac{P\times n(n+1)r}{2400}=\frac{500\times 24(24+1)r}{2400}=130.20r$
Maturity amount $=500\times 24+130.20r=12000+125r$
$\Rightarrow 19725-12000=125r$
$\Rightarrow 7725=125r$
$\Rightarrow r=61.8\%$

Therefore, the rate of interest is $61.8\%$.