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 installment is Rs. $1,000$, find the:
(i) interest earned in $2$ years
(ii) matured value.

Answer 1

(i) Given : $P=$ Rs. $1,000$, $n=2$ year $=24$ months, $r=6$%.
$I=P\times \frac{n(n+1)}{2}\times \frac{r}{12\times 100}$
$=1,000\times \frac{24(24+1)}{2}\times \frac{6}{12\times 100}$
$=1,000\times \frac{24\times 25}{2}\times \frac{6}{12\times 100}$
$=$ Rs. $1,500$.
(ii) Total money deposit in $24$ months $=$ Rs. $1,000\times 24$
$=$ Rs. $24,000$
Matured value $=$ Total sum deposit $+$ interest
$=$ Rs. $24,000+$ Rs. $1,500$
$=$ Rs. $25,500$.