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ICSE Question Bank
2016Q4(c)(i)Banking (Recurring Deposit Account)
NumericalModerate1.5 marks
4(c)

Mr. Lalit invested Rs. 5000 at a certain rate of interest, compounded annually for two years. At the end of first year it amounts to Rs. 5325. Calculate

The rate of interest

Topic: Recurring deposit / interest

Previous-year question practice database

Answer

Exam answer

So,the amount at the end of the second year is ₹5671.

Explanation

(i) P = ₹5000, T = 1 year, A = ₹5325 I= A P ⇒ I = 5325 5000 ⇒ I = 325 So, the interest at the end of first year is ₹325. PRT I= I×100 ⇒R= P× T 325×100 ⇒R= 5000×1 32500 ⇒R= 6.5% 5000 So,the rate of interest at the end of the first year is 6.5%. (ii) The amount at the end of the first year will be the principal for the second year. P = ₹5325, T = 1 year, R = 6.5% PRT I= 5325×6.5×1 ⇒ I= ⇒ I = 346.125 A =P+I ⇒ A = 5325+346.125 ⇒ A = 5671.125 ⇒ A ₹5671 So,the amount at the end of the second year is ₹5671. SECTION B (40 Marks) Attempt any four questions from this section

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