Question

Mr Sharma deposit ₹250 per month every month in a reccuring deposit account for a period of 3 Years.At the time of maturity he gets ₹ 10,110.

I. Find the of interest per annum.
ii. Find the total interest earned by Mr Sharma .

Answer 1

I. 11%
II. ₹ 1110 in interest over 3 years

Explanation:

To solve for the interest rate and the total interest earned, we can use the formula for compound interest:

A = P * (1 + r/n)^(nt)

where A is the maturity amount, P is the principal, r is the interest rate, n is the number of times compounded per year, t is the time in years, and

Since we know the maturity amount (A = ₹ 10,110), the principal (P = 250 * 12 * 3 = 9,000), and the time (t = 3 years), we can rearrange the formula to solve for the interest rate:

r = n * ((A/P)^(1/nt) - 1)

We'll assume that the interest is compounded monthly, so n = 12. Then:

r = 12 * ((10110/9000)^(1/36) - 1)

r ≈ 0.11

So, the interest rate is approximately 11% per year.

To find the total interest earned, we can use the formula:

Interest = A - P

Interest = 10110 - 9000

Interest = 1110

So, Mr Sharma earned ₹ 1110 in interest over 3 years.