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Mathematics

A man has a 5 year recurring deposit account in a bank and deposits ₹ 240 per month. If he recieves ₹ 17,694 at the time of maturity, find the rate of interest.

Banking

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Answer

Let rate of interest be r%.

Given,

P = ₹ 240

M.V. = ₹ 17694

Time (n) = 5 years = 5 × 12 = 60 months.

Maturity value = P × n + P × n(n+1)2×12×r100\dfrac{n(n + 1)}{2 \times 12} \times \dfrac{r}{100}

Substituting values we get :

⇒ 17694 = 240 × 60 + 240 × 60×612×12×r100\dfrac{60 \times 61}{2 \times 12} \times \dfrac{r}{100}

⇒ 17694 = 14400 + 6 × 305r5\dfrac{305r}{5}

⇒ 17694 - 14400 = 6 × 61r

⇒ 3294 = 366r

⇒ r = 3294366\dfrac{3294}{366} = 9%.

Hence, rate of interest = 9%.

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