#### Question

Katrina opened a recurring deposit account with a Nationalised Bank for a period of 2 years. If the bank pays interest at the rate 6% per annum and the monthly instalment is Rs. 1,000, find the:

1) Interest earned in 2 years.

2) Matured value

#### Solution

Given,

P = Rs. 1000

n = 2 years = 24 months

r = 6%

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

`= 1000 xx (24 xx 25)/2 xx 6/(12 xx 100)`

= 1500

Thus, the interest earned in 2 years is Rs. 1500.

2) Sum deposited in two years 24 x 1000 = 24,000

Maturity value = Total sum deposited in two years + Interest

= 24000 + 1500

= 25500

Thus, the maturity value is Rs. 25,500.

Is there an error in this question or solution?

#### APPEARS IN

Solution Katrina Opened a Recurring Deposit Account with a Nationalised Bank for a Period of 2 Years. If the Bank Pays Interest at the Rate 6% per Annum and the Monthly Instalment Is Rs. 1,000, Find The: Concept: Computation of Interest.