Mr. Thomas has a 4 years cumulative time deposit account in Corporation Bank and deposits ₹650 per month. If he receives ₹36,296 at the time of maturity, find:

(i) the total interest earned by Mr. Thomas.

(ii) the rate of interest per annum.

Given,

P = ₹650

n = 4 years = 4 x 12 months = 48 months

Maturity Value = ₹36,296

Sum deposited = ₹650 × 48 = ₹31,200

Maturity value = Sum deposited + Interest

Interest = Maturity value - Sum deposited = ₹36,296 − ₹31,200 = ₹5,096

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

$\therefore I = 650 \times \dfrac{48 \times 49}{2 \times 12} \times \dfrac{r}{100} \\[1em] 5096 = 63700 \times \dfrac{r}{100} \\[1em] r = \dfrac{5096 \times 100}{63700} \\[1em] r =8\%$

i)Mr. Thomas earned ₹5,096 as interest.

ii) The rate of interest was approximately 8% per annum.