Question

Dinkar has a recurring deposit account in a bank for a time period of 3.5 years at 9.5 % p.a. He gets ₹ 78638 at the time of maturity. What is his monthly installment rounded off to nearest whole number ?

• A. Rs 1800
• B. Rs 1600
• C. Rs 2600
• D. Rs 800

Answer 1

The correct option is B

Rs 1600

Let us suppose that the monthly installment is ₹ P

Number of years = 3.5 ( Given )

Total number of months = 3.5 x 12 = 42

Total Amount Deposited = 42 x P = ₹ 42 P

Rate of interest = 9.5 %

Interest Earned = P $\times$ $\frac{42\times (n+1)}{2\times 12}$ $\times$ $\frac{r}{100}$

= P $\times$ $\frac{42\times (42+1)}{2\times 12}$ $\times$ $\frac{9.5}{100}$

= ₹ 7.148P

Amount on maturity = ₹ 78638

Amount on Maturity = Amount Deposited + Interest Earned

₹ 78638 = ₹ 42P + ₹ (7.148) P = (49.148)P

$\Rightarrow$ (49.148)P = ₹ 78638 $\Rightarrow$ P = ₹ 1600.02

Hence Principal = ₹ 1600