John deposited Rs 400 every month in a bank’s recurring deposit account for 2(1)/(2) years. If he gets Rs 1085 as interest at the time of maturity, then the rate of interest per annum is

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Deposit(P) = Rs400 per month Period(n) = 2(1)/(2) years = 3 months Interest = Rs1085 Let r% be the rate of interest ∴ Interest = `("P" xx "n" xx ("n" + 1))/(2 xx 12) xx "r"/(100) 1085 = ₹(400 xx 30 xx 31 xx "r")/(2 xx 12 xx 100) 1085 = 155r ⇒ r = (1085)/(155)` = 7 ∴ Rate 7% p.a.

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