Mohan has a recurring deposit account in a bank for 2 years at 6% p.a. simple interest. If he gets ₹ 1200 as interest at the time of maturity, find :

(i) the monthly instalment

(ii) the amount of maturity.

(i) Let monthly installment be ₹ x.

So,

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

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

$\therefore I = ₹ x \times \dfrac{24 \times 25}{2 \times 12} \times \dfrac{6}{100} \\[1em] = ₹ x \times \dfrac{3}{2} \\[1em] = ₹ \dfrac{3x}{2}$

Given, I = ₹ 1200.

$\therefore \dfrac{3x}{2} = 1200 \\[1em] \Rightarrow x = \dfrac{2400}{3} = 800.$

Hence, monthly instalment = ₹ 800.

(ii) Maturity value = Sum deposited + Interest

= ₹ 800 × 24 + ₹ 1200

= ₹ 19200 + ₹ 1200

= ₹ 20400.

Hence, maturity value = ₹ 20400.