Question

Assertion (A): Pawandeep opened a recurring deposit account in a bank for a period of 2 years. If the bank pays interest at the rate of 6% p.a. and the monthly instalment is ₹ 1000, then the maturity amount is ₹ 25000.

Reason (R): For a recurring deposit account, we compute the interest using following formula:

`S.I. = P xx (n(n + 1))/12 xx R/100`

पर्याय

• A is true, R is false

• A is false, R is true

• Both A and R are true

• Both A and R are false

Answer 1

Both A and R are false

Explanation:

The correct interest formula for a recurring deposit is

`I = P xx (n(n + 1))/(2 xx 12) xx r/100` 

= `P xx (n(n + 1))/24 xx r/100` 

For P = ₹ 1000, n = 24 months, r = 6%:

`I = 1000 xx (24 xx 25)/24 xx 6/100`

= 1000 × 25 × 0.06

= ₹ 1500

Maturity = Total deposits + Interest 

= (1000 × 24) + 1500 

= ₹ 24,000 + ₹ 1,500 

= ₹ 25,500

Therefore, the Assertion ₹ 25,000 is incorrect and the Reason’s formula missing the `1/2` factor so denominator should be 24, not 12 is also incorrect.

Hence, both A and R are false.