Question

Puneet has a Recurring Deposit Account in the Bank of Baroda and deposits ₹140 per month for 4 years. If he gets ₹8,092 on maturity, find the rate of interest given by the bank.

• A. 12%
• B. 10.5%
• C. 10%
• D. 11%

Answer 1

The correct option is C

10%

Installment per month(P) = ₹140

Number of months(n) = 4 x 12 = 48

Amount Deposited = 140 x 48 = ₹6720

Let rate of interest(r)= r % p.a.
$S.I.=P\times \frac{n(n+1)}{2\times 12}\times \frac{r}{100}$

$=140\times \frac{48(48+1)}{2\times 12}\times \frac{r}{100}$

$=140\times \frac{2352}{2\times 12}\times \frac{r}{100}$ = ₹137.2r

Maturity Value = Amount Deposited + Interest

Maturity value= ₹6720 +₹(137.20)r

Given maturity value= ₹8,092

Then ₹6720+ ₹137.20r = ₹8,092

137.20r = ₹8,092 - ₹6,720

$\Rightarrow r=\frac{1,372}{137.20}=10$

r = 10%

Hence, the Rate of Interest = 10%