Question

Inderjeet opened a cumulative time deposit account with Punjab National Bank. Не deposited ₹ 360 per month for 2 years. If the rate of interest be 7% per annum, how much did he get at the time of maturity?

Answer 1

Given:

Monthly deposit (P) = ₹ 360

Time = 2 years = 24 months (n = 24)

Rate of interest = 7% per annum (r = 7%)

Step-wise calculation:

1. Use the standard formula for interest on a cumulative (recurring) deposit under simple interest:

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

2. Compute the factor `(n(n + 1))/(2 xx 12)`: 

n(n + 1) = 24 × 25 

= 600

2 × 12 = 24 

⇒ `(n(n + 1))/(2 xx 12) = 600/24`

= 25

3. Interest earned:

`I = 360 xx 25 xx 7/100` 

= 360 × 25 × 0.07

= 360 × 1.75

= ₹ 630

4. Total amount deposited = P × n

= 360 × 24 

= ₹ 8,640

5. Maturity amount = Total deposited + Interest

= 8,640 + 630

= ₹ 9,270

Inderjeet received ₹ 9,270 at the time of maturity.