Question

Ashish deposite rs 1000 every month is a recurring deposit account for period of 12 months. If the bank pays interest at a certain rate p.A. And ashish gets 12715 as the maturity value of this account at what rate of interest did he pay every month

Answer 1

`R=11\%` p.a.

Explanation:

Given:

the principal amount deposited each month,
`P=Rs. 1000`

amount after maturity of one year,
`A=Rs. 12715`

We have the formula as:

`I=(PR)/(100)*(T(T+1))/(2* 12)`

where:

R = rate of interest per annum

T = time in months

`A-12P=(PR)/(100)*(T(T+1))/(2* 12)` [since the principal is deposited each month]

`715=(1000* R)/(100)* (12* 13)/(24)`

`R=11\%` p.a.

Answer 2

Given :

Principal amount, P = Rs. 1000

Time period = 12 months

The maturity value = Rs. 12,715

We know that,

`$ SI = (PTR)/(100)$`

`$SI = 1000 * (n(n+1))/(2 * 12) * (R)/(100)$`

`$SI = 1000 * (12(12+1))/(2 * 12) * (R)/(100)$`

SI = 65 R

So we know,

maturity value = principal amount + SI

12715 = 1000 + 65 R

65 R = 12715 - 1000

65 R = 11715

R = 18%

So the rate is 18%