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Question
Mohan has a recurring deposit account in a bank for 2 years at 6% p.a. simple interest. If he gets Rs. 1200 as interest at the time of maturity, find:
- the monthly instalment.
- the amount of maturity.
Solution
Interest = Rs. 1200
Period (n) = 2 years = 24 months
Rate (r) = 6% p.a.
i. Let monthly deposit = ₹ P p.m.
∴ Interest = `(P xx n(n + 1))/(2 xx 12) xx r/(100)`
`1200 = (P xx 24 xx 25)/(24) xx (6)/(100)`
`\implies 1200 = (6)/(4)p`
∴ `P = (1200 xx 4)/(6) = 800`
∴ Monthly deposit = ₹ 800
ii. Maturity value = P × n + Interest
= ₹ 800 × 24 + ₹ 1200
= ₹ 19200 + ₹ 1200
= ₹ 20400
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