₹ 50 per month is deposited for 20 months in a recurring deposit account. If the rate of interest is 10%; the maturity value is :

1. ₹ 187.50

2. ₹ 87.50

3. ₹ 2175

4. ₹ 1087.50

Given,

Deposited per month = ₹ 50

Time (n) = 20 months

Rate of interest = 10%

By formula,

Interest = $P \times \dfrac{n(n + 1)}{2 \times 12} \times \dfrac{r}{100}$

Substituting values we get :

$\Rightarrow \text{Interest} = 50 \times \dfrac{20 \times (20 + 1)}{2 \times 12} \times \dfrac{10}{100} \\[1em] = 50 \times \dfrac{20 \times 21}{24} \times \dfrac{1}{10} \\[1em] = 5 \times 5 \times 3.5 \\[1em] = 87.5$

Maturity value = Sum deposited + Interest

= P × n + Interest

= ₹ (50 × 20) + ₹ 87.5

= ₹ 1000 + ₹ 87.5

= ₹ 1087.5

Hence, Option 4 is the correct option.