Question

Mr. Bajaj needs $Rs.30,000$ after $2$ years. What least money (in multiple of $5$) he must deposit every month in a recurring deposit account to get required money at the end of $2$ years, the rate of interest is $8\%$ per annum?

Answer 1

Let's assume the installment per month to be $P.$

Number of months, $n=24$
Rate of interest $r=8\%$ per annum

The interest on a recurring deposit account is calculated by,

$S.I=\frac{P\times R\times n\left(n+1\right)}{100\times 12\times 2}$

where $P$ is the monthly installments, $r$ is the rate of interest per annum and $n$ is the number of months.

So,

$S.I=\frac{P\times 8\times 24\left(24+1\right)}{100\times 12\times 2}$

$=\frac{P\times 8\times 25}{100}$

$=2P$

Thus,
The amount deposited in the period of $24$ months will be $24P.$

And, given the maturity value is equal to $Rs.30,000.$ So,
$\begin{array}{cc}24P+2P& =30000\\ 26P& =30000\\ P& =Rs.1153.84\end{array}$

So, the least money Mr. Bajaj should deposit in multiple of $5$ is $Rs.1155.$