A recurring deposit account of per month has a maturity value of . If the rate of interest is 8% and the interest is calculated at the end of every month, find the time (in months) of this Recurring Deposit Account.
Given
The principal amount
Maturity Value
Rate
We have to determine the interest is calculated at the end of every month and also the time (in months) of this Recurring Deposit Account.
Let us assume the number of months
hence the total amount deposited be
From the simple interest formula, we know that
Simple interest formula is given as:
Where SI = simple interest
P = principal
R = interest rate (in percentage)
T = time duration (in years)
Simple interest for the recurring time period
On substituting the known values we get
Maturity value
On factorizing we get
or
or
months cannot be negative
Therefore, the number of months
Hence, the number of months