Question

Mr. Tiwari receives ₹6455 at the end of one year at the rate of 14% per annum in a recurring deposit account. What is his monthly installment (in ₹)?

• A. 500

Answer 1

The correct option is A 500

Let the Principal ( sum deposited per month ) be P

Time Period (n) = 1 x 12 = 12

Total Amount Deposited = 12 P

Rate of Interest = 14 %

Interest = P $\times$ $\frac{n\times (n+1)}{2\times 12}$ $\times$ $\frac{r}{100}$

= P $\times$ $\frac{12\times (12+1)}{2\times 12}$ $\times$ $\frac{14}{100}$

= 0.91P

Maturity Value = Total Amount Deposited + Interest

Given , Maturity Value =₹ 6645

$\therefore$ 6645 = 12 P + 0.91 P

= 12.91 P

$\therefore$ P = $\frac{6645}{12.91}$

P = ₹500