Question

Sohail opened a recurring deposit account in Union bank and he deposits ₹ 150 per month for a time period of 8 months. He receives ₹ 1236 at the time of maturity. What is the rate of interest?

• A. 16%p.a
• B. 8%p.a
• C. 18%p.a
• D. 10%p.a

Answer 1

The correct option is B

8%p.a

Monthly installment = ₹ 150

Number of Months = 8,

Amount deposited = 150 x 8 = ₹ 1200

Maturity value = ₹ 1236

Interest on his deposit = ₹ (1236 – 1200) = ₹ 36

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

Let the rate of interest be r

36 = 150 $\times$ $\frac{8\times (8+1)}{2\times 12}$ $\times$ $\frac{r}{100}$

Therefore, rate = $\frac{(36\times 100\times 12)}{(4\times 9\times 150)}$ = 8% p.a