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Mathematics

Katrina opened a recurring deposit account with a Nationalised Bank for a period of 2 years. If the bank pays interest at rate of 6% per annum and the monthly instalment is ₹ 1000, find the :

(i) interest earned in 2 years

(ii) maturity value.

Banking

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Answer

(i) Given,

P = ₹ 1000, r = 6% and n = (2 × 12) = 24 months.

I = P×n(n+1)2×12×r100P \times \dfrac{n(n + 1)}{2 \times 12} \times \dfrac{r}{100}

∴I=₹1000×24×252×12×6100=₹1000×32=₹1500\therefore I = ₹ 1000 \times \dfrac{24 \times 25}{2 \times 12} \times \dfrac{6}{100} \\[1em] = ₹ 1000 \times \dfrac{3}{2} \\[1em] = ₹ 1500

Hence, the interest earned in 2 years = ₹ 1500.

(ii) Maturity value = Sum deposited + Interest

= ₹ 1000 × 24 + ₹ 1500

= ₹ 24000 + ₹ 1500

= ₹ 25500.

Hence, maturity value = ₹ 25500.

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