Question

Mr. Siddhant opened a recurring deposit account in a bank. He deposited in the installment of Rs. 2500 per month for two years. At the time of maturity he received an amount of Rs. 67,500. Calculate the rate of interest per annum.

• A. 15%p.a
• B. 6%p.a
• C. 22%p.a
• D. 12%p.a

Answer 1

The correct option is D

12%p.a

Monthly installment = Rs. 2500

n = 24,

Amount deposited = $2500\times 24$ = Rs. 60000

Maturity value = Rs. 67500

$\therefore$ Interest on his deposit = Rs. (67500 – 60000) = Rs. 7500

We know that interest I =$\frac{n(n+1)}{2}\times \frac{(Installment\times rate)}{(100\times 12)}$

$\Rightarrow 7500=\frac{(24\times 25)}{2}\times \frac{(2500\times rate)}{(100\times 12)}$

Therefore, rate = $\frac{(7500\times 100\times 24)}{(24\times 25\times 2500)}$= 12%p.a.