Question

Each of A and B both opened recurring deposit accounts in a bank. If A deposited Rs 1,200 per month for 3 years and B deposited Rs1,500 per month for $2\frac{1}{2}$ years; find, on maturity, who will get more amount and by how much? The rate of interest paid by the bank is 10% per annum.

• A. A, Rs 812.50
• B. B, Rs 952.50
• C. B, Rs 860.50
• D. Can not be determined

Answer 1

The correct option is B B, Rs 952.50

For A

Installment per month(P) = Rs1,200

Number of months(n) = 36

Rate of interest(r)= 10%p.a.

$S.I.=P\times \frac{n(n+1)}{2\times 12}\times \frac{r}{100}$
$=1200\times \frac{36(36+1)}{2\times 12}\times \frac{10}{100}$
$=1200\times \frac{1332}{24}\times \frac{10}{100}=Rs6660$

The amount that A will get at the time of maturity

=Rs(1,200x36)+ Rs6,660

=Rs43,200+ Rs6,660

= Rs49,860

For B

Installment per month(P) = Rs1,500

Number of months(n) = 30

Rate of interest(r)= 10%p.a.
$S.I.=P\times \frac{n(n+1)}{2\times 12}\times \frac{r}{100}$
$=1500\times \frac{30(30+1)}{2\times 12}\times \frac{10}{100}$
$=1500\times \frac{930}{24}\times \frac{10}{100}=Rs5812.5$​​​​​​​

The amount that B will get at the time of maturity

=Rs(1,500x30)+ Rs5,812.50

=Rs45,000+ Rs5,812.50

= Rs50,812.50

Difference between both amounts= Rs50,812.50 - Rs49,860

= Rs952.50

Then B will get more money than A by Rs 952.50