Question

Sanjeev deposits 500 per month in a recurring deposit account for 12 months. Find the amount he will receive at the time of maturity, if the rate of interest is 10% per annum.

Answer 1

P = 500 (monthly deposit)

n = 12 months

r = 10% per annum

Step 1: Calculate Interest

Interest `= (Pxxn(n+1))/2 xx r/(12xx100)`

Interest = `(500xx12xx13)/2 xx 10/1200`

`= (12xx13)/2`

= 78

Interest = 500 × 78 `xx10/1200`

`= 500xx78xx1/120`

= 500 × 0.65

= 325

Step 2: Calculate Maturity Amount

500 × 12

= 6000

Amount = 6000 + 325

= 6325