Question

(i) Puneet has a Recurring Deposit Account in the Bank of Baroda and deposits Rs 140 per month for 4 years. If he gets Rs 8,092 on maturity, find the rate of interest given by the bank.

(ii) David opened a Recurring Deposit Account in a bank and deposited Rs 300 per month for two years. If he received Rs 7,725 at the time of maturity, find the rate of interest per annum.

Answer 1

(i) P = Rs. 140,

no of months = 48,

Maturity Value = Rs.8092

rate = r %

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

$8092=140\times 48+140\times \frac{48(48+1)}{2\times 12}\times \frac{r}{100}$

$r=\frac{(8092-140\times 48)\times (2\times 12)\times 100}{140\times 48\times 49}$

$\Rightarrow r=10\%$

(ii) P = Rs. 300,

no of months = 24,

Maturity Value = Rs.7725

rate = r %

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

$7725=300\times 24+300\times \frac{24(24+1)}{2\times 12}\times \frac{r}{100}$

$r=\frac{(7725-300\times 24)\times (2\times 12)\times 100}{300\times 24\times 25}$

$\Rightarrow r=7\%$