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]

Answer 1

Each subpart: 1.5 Marks

Katrina deposits 1000 per month for 2 years
Total money deposited = $1000\times 24$
Rate of interest = 6% p.a
Equivalent principal = $1000\times \frac{24(24+1)}{2}$
$1000\times \frac{24\times 25}{2}$
$=Rs(1000\times 12\times 25)$
(i) Interest = $P\times \frac{R}{100}\times T$
$=1000\times 12\times 25\times \frac{6}{100}\times \frac{1}{12}=Rs1500$
(ii) Matured value = 24000 + 1500
= Rs 25500