Question

Peter has a recurring deposit account in Punjab National Bank at Sadar Bazar, Delhi for 4 years at 10% p.a. He will get Rs 6,370 as interest on maturity. Find

1) monthly installment

2) the maturity value of the account.

Answer 1

1) Let the monthly installment be Rs P

n = 4 year = `4 xx 12` months = 48 months

Rate of Interest, r = 10%

Interest = Rs 6370

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

`=> 6370 = P xx (48 xx 49)/24 xx 10/100`

`=> 6370 = P xx 49/5`

`=> P = (637 xx  5)/49 = Rs 650`

Thus the monthly instalment is Rs 650

2) Total money deposited in bank = 48 x Rs 650 = Rs 31200

∴ Maturity value = Total money deposited + Interest

= Rs 31200 + 6370

= Rs 37570