Question

Mr Gupta opened a recurring deposit account in a bank. He deposited Rs 2500 per month for 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
[4 MARKS]

Answer 1

Part (i): 1 Mark
Part (ii): 3 Marks

(i) No of instalments, n = 24
Amount deposited $=Rs(2500\times 24)=Rs60,000$
Interest = Rs(67,500 - 60,000)
= Rs 7500
(ii) Interest = $\frac{n(n-1)}{2}\times \frac{MonthlyInstallment\times Rate}{100\times 12}$
$\Rightarrow 7500=\frac{24\times 25}{2}\times \frac{2500\times Rate}{1200}$
$\Rightarrow 7500=625\times Rate$
$\Rightarrow Rate=\frac{7500}{625}=12\%$