Question

Sahil opened a Recurring Deposit Account in a bank and deposits Rs 150 per month for 8 months. At the time of maturity, he received Rs 1,236. Find the rate of interest.
[4 MARKS]

Answer 1

Formula: 1 Mark
Steps: 2 Marks
Answer: 1 Mark

Monthly instalment = Rs 150
Time = 8 months
Total amount deposited = Rs $150\times 8$ = Rs 1200
Principal for 1 month = Monthly instalment $\times \frac{n(n+1)}{2}$
$=Rs150\times \frac{8(8+1)}{2}$
$=Rs75\times 8\times 9$
$=Rs5400$
Let rate of interest = R% per annum
$Interest=\frac{P\times R\times T}{100}$
$=Rs\frac{5400\times R\times 1}{100\times 12}=Rs\frac{9}{2}R$
According to question,
Amount received on maturity = 1236
$\Rightarrow$ Total amount deposited + Interest = 1236
$\therefore 1200+\frac{9}{2}R=1236$
$\Rightarrow \frac{9}{2}R=36$
$\Rightarrow R=\frac{36\times 2}{9}$
$\Rightarrow R=8$
$\therefore$ Rate of interest = $8$$\%$ per annum