Question

Mr Bittu deposits a certain sum of money each month in a recurring deposit account. If the rate of interest is $8\%$ per annum and Mr Bittu gets Rs $8,088$ from the bank after $3$ years. Find the value of his monthly instalment.

• A. $400$
• B. $800$
• C. $200$
• D. $140$

Answer 1

Answer: (C)

$200$

Let the monthly installment be $P$

Given, maturity value $=8088$, $n=3$ years $=3\times 12=36$ months, $r=8\%$

Interest $=\frac{Pn(n+1)r}{2400}$

$=\frac{P\times 36\times 37\times 8}{2400}$

$=\frac{111P}{25}$

We know, amount $=Pn+\frac{111P}{25}$

$8088=36P+\frac{111P}{25}$

$=\frac{1011P}{25}$

$\therefore 8088=\frac{1011P}{25}$

$\therefore P=200$

Therefore, monthly installment is Rs. $200$.