Question

Kiran deposited \[200\] per month for \[36\] months in a bank's recurring deposit account. If the bank pays interest at the rate of \[11\% \] per annum, find the amount she gets on maturity?

Answer 1

Hint: In this question, the given amount of deposited per month and interest at the rate of annum. We have to find out how much maturity she gets. By using given values to find interest of the deposit. Then we will find the total amount by adding the interest amount and total deposited amount.

Formula used: The formula to calculate the interest in recurring deposit is
\[I = \dfrac{{P \times n(n + 1) \times r}}{{12 \times 2 \times 100}}\]
 where I is the interest, \[n\] is time in months and \[r\] is rate of interest per annum and \[P\] is the monthly deposit.

Complete step-by-step answer:
It is given that Kiran deposited \[200\] per month for \[36\] months in a bank's recurring deposit account.
Also given that, the banks pay interest at the rate of \[11\% \] per annum.
We need to find out the amount she gets on maturity.
The amount deposited per month (P) = Rs. \[200\].
Period of the recurring deposit (n)= \[36\].
Rate (r) = \[11\% \].
Now the amount deposited in \[36\] months = Rs.\[200 \times 36 = 7200\].
Simple interest (S.I.)\[ = P\left\{ {\dfrac{{n(n + 1)}}{2}} \right\} \times \dfrac{1}{{12}} \times \dfrac{r}{{100}}\]
Substituting given values into simple interest formula,
\[ \Rightarrow 200\left\{ {\dfrac{{36(36 + 1)}}{2}} \right\} \times \dfrac{1}{{12}} \times \dfrac{{11}}{{100}}\]
Simplifying we get,
\[ \Rightarrow 3 \times 37 \times 11\]
Multiplying the terms,
\[ \Rightarrow 1221\]
$\therefore $ Hence, Kiran will get the amount on maturity =Rs. \[1221 + 7200 = 8421\].

Note: A recurring deposit is a special kind of term deposit offered by banks which help people with regular incomes to deposit a fixed amount every month into their recurring deposit account and earn interest at the rate applicable to fixed deposits.[1] It is similar to making fixed deposits of a certain amount in monthly instalments. This deposit matures on a specific date in the future along with all the deposits made every month. Recurring deposit schemes allow customers an opportunity to build up their savings through regular monthly deposits of a fixed sum over a fixed period of time. The minimum period of a recurring deposit is six months and the maximum is ten years.