Multiple choice

A man made annual fixed deposits in a bank at the end of each year, earning a simple interest rate of 12% per annum for a duration of 6 years. When he visited the bank at the end of the 6th year to withdraw the money, he found that he had accumulated Rs. 6,240. What was the specific amount of money he used to deposit at the end of each year?

  1. Rs. 320

  2. Rs. 620

  3. Rs. 900

  4. Rs. 800
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let the annual deposit be x. The deposits earn simple interest for 5, 4, 3, 2, 1, and 0 years respectively. The total amount is 6x + x * 0.12 * (5+4+3+2+1) = 6x + 0.12 * 15x = 6x + 1.8x = 7.8x. Setting 7.8x = 6240 gives x = 800.

AI explanation

Because each fixed deposit earns simple interest at 12% per annum, the interest earned on one deposit of Rs. x over durations of 5, 4, 3, 2, 1, and 0 years creates an equated total. The total interest factor per deposit is 12% multiplied by 15 (the sum of the years), which equals 180%, meaning 1.8x in interest; adding the principal of the six deposits, the total return is 7.8x. By equating this to the final accumulated amount, 7.8x = 6240, so x = 800. The result is Rs. 800.

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