Multiple choice

Deepak opened a recurring deposit account in a bank and deposited Rs. 500 per month for 3 years. If he will receive an amount of Rs. 24,000 at the time of maturity, what is the rate of interest?

  1. 11.62%

  2. 1.62%

  3. 10.62%

  4. 21.62%

  5. 2.62%
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Interest accumulated on recurring deposit = [P n (n+1) r] / 2400, where, P = Rs. 500, n = (12 x 3) = 36 months, r = ? Interest accumulated = 24,000 - (500 x 36)  = 24,000 - 18,000 = Rs. 6,000 Therefore, by using above formula,  6000  = [500 x 36 x 37 x r] / 2400 6,000 = 277.5r r = 21.62%

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