Question

Mr. Ashok has an account in the Central Bank of India. The following entries are from his passbook:

Date	Particulars	Withdrawals (₹)	Deposits (₹)	Balance (₹)
01-01-05	B/F	-	-	1,200·00
07-01-05	By cash		500·00	1,700·00
17-01-05	To cheque	400·00	-	1,300·00
10-02-05	By cash	-	800·00	2,100·00
25-09-05	By cheque	500·00	-	1,600·00
20-09-05	By cash	-	700·00	2,300·00
21-11-05	To cheque	600·00	-	1,700·00
05-12-05	By cash	-	300·00	2,000·00

If Mr. Ashok gets Rs. 83.75 as interest at the end of the year where the interest is compounded annually, calculate the rate of interest paid by the bank in his Savings Bank Account on 31st December 2005.

Answer 1

Month	Minimum Balance between 10th day and last day (in ₹)	Qualifying Amount for interest
January	1,300	1,300
February	1,600	1,600 x 8 = 12,800
March	1,600
April	1,600
May	1,600
June	1,600
July	1,600
August	1,600
September	1,600
October	2,300	2,300
November	1,700	1,700
December	2,000	2,000
Total		₹ 20,100

Principal for 1 month = ₹ 20,100
Let x be Rate interest 
then
Interest = `(20,100 xx x xx 1)/(100 xx 12)`

∴ 83·75 = `(20,100x)/(1,200)`

x = `(83·75 xx 1,200)/(20,100)`

x = 5
∴ Rate = 5%