Question

Mr. Gupta opened a Recurring Deposit Account in a bank. He deposited Rs 2,500 per month for two years. At the time of maturity, he got Rs 67,500. Find :
(i) The total interest earned by Mr. Gupta
(ii) The rate of interest per annum.
[3 MARKS]

Answer 1

Part (i): 1 Mark
Part (ii): 2 Marks

Monthly deposit = Rs 2,500
Number of months(n) = 24
$\therefore$ Amount deposited in 24 months = $24\times Rs2,500=Rs60,000$
Principal equivalent for one month $=\frac{n(n+1)}{2}\times Monthlydeposit=\frac{24(24\times 1)}{2}\times 2500=Rs12\times 25\times 2,500$
$\therefore Interest=\frac{P\times R\times T}{100}=\frac{12\times 25\times 2500\times R\times 1}{100\times 12}=625R$
Now, Amount received on maturity = Total amount deposited + Interest = 60,000 + 625 R
According to question,
Amount received = Rs 67,500
$\Rightarrow 67,500=60,000+625R$
$\Rightarrow 7,500=625R\Rightarrow R=12$
(i) The total interest earned by Mr. Gupta = Rs 67,500 - Rs 60,000 = Rs 7,500
(ii) The rate of interest per annum = 12%