Question

Sahil opened a Recurring Deposit Account in a bank and deposits $₹150$ per month for $8$ months. At the time of maturity, he gets an interest of $₹1236$. Find the rate of interest.

Answer 1

Step 1: Given Data

The amount of money deposited per month, $P=₹150$,

The number of months, $n=8$ months,

The maturity value is $₹1236$.

The Maturity value is given by: $\left(P\times n\right)\left[1+\frac{r(n+1)}{2400}\right]$

The rate of interest is given by, $r$.

Step 2: Calculate the rate of interest

Therefore, from the formula of the Maturity value, the rate of interest can be calculated as,

$$\begin{gathered} 1236=\left(150\times 8\right)\left[1+\frac{r\left(8+1\right)}{2400}\right] \\ \Rightarrow 1236=1200\left[\frac{2400+9r}{2400}\right] \\ \Rightarrow \frac{1236\times 2400}{1200}=2400+9r \\ \Rightarrow 9r=2472-2400 \\ \Rightarrow r=\frac{72}{9} \\ \Rightarrow r=8\% \end{gathered}$$

Final answer: The rate of interest is 8% of the given account.