Problem Statement
Priya opened a Recurring Deposit account in a nationalized bank for 2 years (24 months). If she deposits ₹1,500 per month and receives ₹39,750 as the maturity value at the end of the period, find:
(i) The total interest earned by Priya.
(ii) The rate of interest per annum offered by the bank.
Verified Solution & Marking Scheme
Find Total Sum Deposited and Total Interest
Monthly installment $P = ₹1,500$, number of months $n = 2 \times 12 = 24$.
$\text{Total amount deposited} = P \times n = 1500 \times 24 = ₹36,000$
$\text{Total Interest } I = \text{Maturity Value} - \text{Total Deposited} = 39750 - 36000 = ₹3,750$
Apply the RD Interest Formula to find rate r
$I = P \times \frac{n(n+1)}{2 \times 12} \times \frac{r}{100}$
$3750 = 1500 \times \frac{24 \times 25}{24} \times \frac{r}{100} = 1500 \times 25 \times \frac{r}{100} = 15 \times 25 \times r = 375 r$
$r = \frac{3750}{375} = 10\% \text{ per annum}$