Banking — Multiple Choice Questions

If Vijay opened a recurring deposit account in a bank and deposited ₹800 per month for 1½ years, then the total money deposited in the account is

1. ₹11400
2. ₹14400
3. ₹13680
4. none of these

Answer

Here,
P = money deposited per month = ₹800,
n = number of months for which the money is deposited = 1 x 12 + 6 = 18

Total money deposited by Vijay = ₹800 x 18 = ₹14400

∴ Option 2 is the correct option.

Mrs. Asha Mehta deposit ₹250 per month for one year in a bank’s recurring deposit account. If the rate of (simple) interest is 8% per annum, then the interest earned by her on this account is

1. ₹65
2. ₹120
3. ₹130
4. ₹260

Answer

Here,
P = money deposited per month = ₹250,
n = number of months for which the money is deposited = 1 x 12 = 12,
r = simple interest rate percent per annum = 8

Using the formula:

$I = P \times \dfrac{n(n+1)}{2 \times 12} \times \dfrac{r}{100} \text{, we get} \\[0.7em] I = \Big( 250 \times \dfrac{12 \times 13}{2 \times 12} \times \dfrac{8}{100} \Big) \\[0.5em] \enspace\medspace = \text{₹130}$

Interest earned by Mrs. Asha Mehta = ₹130

∴ Option 3 is the correct option.

Mr. Sharma deposited ₹500 every month in a cumulative deposit account for 2 years. If the bank pays interest at the rate of 7% per annum, then the amount he gets on maturity is

1. ₹875
2. ₹6875
3. ₹10875
4. ₹12875

Answer

Here,
P = money deposited per month = ₹500,
n = number of months for which the money is deposited = 2 x 12 = 24,
r = simple interest rate percent per annum = 7

Using the formula:

$I = P \times \dfrac{n(n+1)}{2 \times 12} \times \dfrac{r}{100} \text{, we get} \\[0.7em] I = \Big( 500 \times \dfrac{24 \times 25}{2 \times 12} \times \dfrac{7}{100} \Big) \\[0.5em] \enspace\medspace = \text{₹875}$

Using the formula:

$MV = P \times n + I \text{, we get} \\ MV = (500 \times 24) + 875 \\ \qquad\medspace = 12000 + 875 \\ \qquad\medspace = \text{₹12875}$

The amount Mr. Sharma will get at the time of maturity = ₹12875

∴ Option 4 is the correct option.

Radha deposited ₹ 400 per month in a recurring deposit account for 18 months. The qualifying sum of money for the calculation of interest is :

1. ₹ 3600

2. ₹ 7200

3. ₹ 68,400

4. ₹ 1,36,800

Answer

Since, Radha deposits ₹ 400 per month in a recurring deposit account for 18 months, thus the amount deposited in first month will earn interest for 18 months, the amount deposited in second month will earn interest for 17 months and so on.

$\text{Qualifying sum }= ₹ 400 \times (18 + 17 + 16 + ........ + 1) \\[1em] = ₹ 400 \times \dfrac{18(18 + 1)}{2} \\[1em] = ₹ 400 \times 9 \times 19 \\[1em] = ₹ 68,400.$

Hence, Option 3 is the correct option.