Question

For a recurring deposit account in a bank, the deposit is ₹ 1,000 per month for 2 years at 10% p.a. rate of interest.

Statement (1): The interest earned is 10% of ₹ (24 × 1,000).

Statement (2): For monthly instalment = ₹ P, number of instalment = n and rate of interest r% p.a.; the interest earned = `(p xx n xx (n + 1))/12 xx r/100`.

पर्याय

• Both the statements are true.

• Both the statements are false.

• Statement 1 is true, and statement 2 is false.

• Statement 1 is false, and statement 2 is true.

Answer 1

Statement 1 is false, and statement 2 is true.

Explanation:

Interest is not simply 10% of the total deposit because each monthly instalment remains in the account for a different period.

Therefore, Statement 1 is incorrect.

The correct formula is:

Interest = `P × [(n(n + 1)) /(2 xx 12)] × r / 100`

Here,

P = ₹1,000, n = 24, r = 10%.

Therefore, Statement 2 is correct.