Question

Mohan has a recurring deposit account in a bank for 2 years at 6% p.a. simple interest. If he gets Rs 1,200 as interest at the time of maturity, find :

(i) the monthly instalment

(ii) the amount of maturity.

Answer 1

(i) P = Rs. 1200,
n = 2 x 12 = 24 months,
r = 6%

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

⇒$1200=P\times \frac{24(24+1)}{2\times 12}\times \frac{6}{100}$

⇒$1200=P\times \frac{3}{2}$

⇒$P=1200\times \frac{2}{3}$

⇒ $P=Rs800$

So the monthly instalment is Rs. 800.

(ii) Total sum deposited = $P\times n=Rs.800\times 24=Rs.19200$

∴ Amount of maturity = Total sum deposited + Interest on it

= Rs. 19200 + Rs. 1200

= Rs 20400