Question

Each of A and B opened a recurring deposit account in a bank. If A deposited Rs 1,200 per month for 3 years and B deposited Rs 1,500 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.

Answer 1

For Person A

P = Rs. 1200,

no of months = 36,

r = 10%

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

$=1200\times 36+1200\times \frac{36(36+1)}{2\times 12}\times \frac{10}{100}=Rs.49860$

For Person B

P = Rs. 1500, no of months = 30, r = 10%

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

$=1500\times 30+1500\times \frac{30(30+1)}{2\times 12}\times \frac{10}{100}=Rs.50812.5$

B will get more amount. The difference is $50812.5-49860=Rs.952.5$