Multiple choice

Rohit opened a recurring deposit account in the bank by depositing Rs. 250 per month for 11 months. The rate of interest is 9% per annum and the interest amount is calculated at the end of each month.

Which of the following could be the maturity value of the recurring deposit?

  1. Rs. 1,873.75

  2. Rs. 3,873.75

  3. Rs. 2,873.75

  4. Rs. 873.75

  5. Rs. 7,873.75
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest accumulated on recurring deposit account = [P n (n + 1) r] / 2400, where, P = Rs. 250 , n = 11, r = 9%

Interest accumulated = [250 x 11 x 12 x 9] / 2400 = Rs. 123.75 Maturity value = Total amount deposited + Interest accumulated = (250 x 11) + 123.75 = Rs. 2,873.75

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