NumericalModerate3 marks
In what time will Rs. 1500 yield Rs. 496.50 as compound interest at 10% per annum compounded annually?
Topic: Recurring deposit / interest
Previous-year question practice database
Answer
Exam answer
Principal P = ₹1,500 Compound interest = ₹496.50 Rate = 10% per annum
Amount: A = P + compound interest
= ₹1,500 + ₹496.50
= ₹1,996.50
Formula:
A = P(1 + R/100)ⁿ
Substituting:
1996.50 = 1500(1.10)ⁿ
1996.50/1500 = (1.10)ⁿ
1.331 = (1.10)ⁿ
Since: 1.1³ = 1.331
n = 3
Answer:
3 years.
Explanation
The compound-interest amount is first obtained by adding the interest to the principal. Then use A = P(1 + R/100)ⁿ and identify the power of 1.1 that gives 1.331.
More from Banking (Recurring Deposit Account)
A and B opened a recurring deposit account in a bank which is paying simple interest at 9% per annum. A deposited ₹ 1,500 for one year and B deposited ₹ 1,200 for 15 months. The amount invested by :2026interest earned by Vinay.2026sum deposited by Rohit every month2026Mr. Anuj deposits ₹500 per month for 18 months in a recurring deposit account at a certain rate. If he earns ₹570 as interest at the time of maturity, then his matured amount is:2025the rate of interest.2025how much more interest Mrs. Rao will receive if she had deposited ₹50 more per month at the same rate of interest and for the same time.2025