Question

Mr. Anil has a recurring deposit account. He deposits a certain amount of money per month for 2 years. If he received an interest whose value is the double of the deposit made per month, then find the rate of interest.

Answer 1

Given:

• Period = 2 years = 24 months
• Interest = double of the monthly deposit
• Let monthly deposit = ₹ P
• Rate of interest = r% p.a.

Interest on recurring deposit:

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

Substituting n = 24:

I = `(P xx 24 xx 25)/(2xx 12) xx r/100`

I = `25P xx r/100`

Interest is double the monthly deposit:

I = 2P

∴ 2P = `25P xx r/100`

2 = `(25r)/100`

r = `(2 xx 100)/25`

r = 8%