Question

Kiran deposited Rs.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.
A.Rs.8412
B.Rs.8421
C.Rs.2481
D.Rs.1234

Answer 1

Hint: In this question, we need to determine the amount which Kiran’s get on the maturity of the deposited amount in the bank after 36 months at regular interval of time such that the bank pays interest of 11 % per annum on the deposited amount. For this, we will use the relation between the interest gained on the deposited amount, rate of interest and time period.

Complete step-by-step answer:
The total amount deposited by Kiran Rs.200 for the time period of 36 months monthly is given as:
 $
\Rightarrow A = nP \\
   = 36 \times 200 \\
   = 7200 - - - - (i) \\
  $
The interest gained on the monthly deposit of the amount is given as $ I = \dfrac{{Pn(n + 1)r}}{{2400}} $ where, P is the monthly deposited amount, ‘n’ is the total time period and ‘r’ is the rate of interest.
Substituting the value of the monthly deposit as 200, time period as 36 months and rate of interest as 11% in the equation $ I = \dfrac{{Pn(n + 1)r}}{{2400}} $ to determine the total interest gained by Kiran.
 $
\Rightarrow I = \dfrac{{Pn(n + 1)r}}{{2400}} \\
   = \dfrac{{200 \times 36 \times 37 \times 11}}{{2400}} \\
   = 1221 - - - - (ii) \\
  $
So, the amount which Kiran receives on the maturity of the amount in the bank is the sum of the amount deposited and the interest gained on it.
 $
\Rightarrow M = I + A \\
   = 1221 + 7200 \\
   = 8421 \\
  $
Hence, determine the amount which Kiran’s get on the maturity of the deposited amount in the bank after 36 months is Rs.8421.

So, the correct answer is “Option B”.

Note: Here, in this question we cannot use the simple interest formula directly as the amount is not deposited one time rather the amount has been deposited monthly and so, each month the interest amount will be applied.