Multiple choice

A person deposits Rs. 400 per month in a recurring deposit scheme for 12 months. If the maturity amount is Rs. 4950, find the rate of interest per annum.

  1. 2.5%

  2. 3.6%

  3. 4.8%

  4. 5.7%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Total deposited = 400 * 12 = 4800. Interest = 4950 - 4800 = 150. Using the formula for recurring deposit interest: I = P * (n(n+1)/24) * (R/100), where P=400, n=12. 150 = 400 * (12*13/24) * (R/100) = 400 * 6.5 * R / 100 = 26R. R = 150/26 = 5.769%. The closest option is 5.7%.

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