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Question

Katrina opened a recurring deposit account with a Nationalised Bank for a period of 2 years. If the bank pays interest at the rate of 6% per annum and the monthly instalment is Rs 1,00, find the:
(i) Interest earned in 2 years
(ii) Matured value
[3 MARKS]

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Solution

Each subpart: 1.5 Marks

Katrina deposits 1000 per month for 2 years
Total money deposited = 1000×24
Rate of interest = 6% p.a
Equivalent principal = 1000×24(24+1)2
1000×24×252
=Rs(1000×12×25)
(i) Interest = P×R100×T
=1000×12×25×6100×112=Rs1500
(ii) Matured value = 24000 + 1500
= Rs 25500

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