Question

Mr. Siddhant opened a recurring deposit account in a bank. He deposited in the installment of ₹ 2500 per month for two years. At the time of maturity he received an amount of ₹ 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

Sum Deposited Per month (P) = ₹ 2500

Number of Months = 2 x 12 = 24 Months

Amount deposited = $2500\times 24$ = ₹ 60000

Let the Rate of Interest be r

Maturity value = ₹ 67500

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

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

7500 = 2500$\times$ $\frac{24\times (24+1)}{2\times 12}$ $\times$ $\frac{r}{100}$

7500 = 625r

r = $\frac{7500}{625}$ = 12 %

Therefore,Rate of Interest = 12%p.a.