Question

Sohail opened a recurring deposit account in Union bank and he deposits Rs 150 per month for a time period of 8 months. He receives Rs 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 = Rs. 150

n = 8,

Amount deposited = 150 ´ 8 = Rs. 1200

Maturity value = Rs. 1236

\ Interest on his deposit = Rs. (1236 – 1200) = Rs. 36

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

$\Rightarrow$ $36=\frac{(8\times 9)}{2}\times \frac{(150\times rate)}{(100\times 12)}$

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