Multiple choice

Which of the following is rate of interest given to Radha, if she receives the maturity amount of Rs. 6,455 from her recurring deposit account with the monthly deposit of Rs. 500 for one year?

  1. 24%

  2. 4%

  3. 14%

  4. 11%

  5. 2.4%

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Interest accumulated = [P n (n + 1) r] / 2400, where P = Rs. 500, n = 12 months, r = ? Interest accumulated = 6,455 - (500 x 12)  = 6, 455 - 6,000 = 455 Now, by using above formula we get 455 = [500 x 12 x 13 x r] / 2400 r = 14%