Same chapter1 markDifficulty: Easy
In a recurring deposit of ₹P per month for n months, the total sum deposited is:
Banking
2 marksDifficulty: Easy
Why is the interest on a recurring deposit calculated on n(n+1)/2 instalments rather than on n instalments?
Original Khojo Papers practice question — not from a past board paper.
Answer
Each instalment stays in the account for a different length of time: the first for n months, the second for n − 1 months and so on down to the last, which stays for one month. Adding those periods gives n + (n − 1) + ... + 1 = n(n+1)/2 months of one instalment, which is what the formula uses.
No citable source has been recorded for this record. Treat it as practice material, not as fact.
Explanation
The sum of the first n natural numbers is n(n+1)/2.
Related questions
From the same topic and chapter, at a similar level.
Same chapter1 markDifficulty: Easy
The maturity value of a recurring deposit account is:
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Same chapter2 marksDifficulty: Easy
Rahul deposits ₹800 per month in a recurring deposit account for 18 months. Find the total sum he deposits.
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Same chapter2 marksDifficulty: Easy
State two differences between a recurring deposit account and a savings bank account.
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Same chapter2 marksDifficulty: Easy
Anita deposits ₹800 per month in a recurring deposit account for 18 months at 8% per annum. Find the interest she earns.
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Same chapter4 marksDifficulty: Medium
Anita deposits ₹1,000 per month in a recurring deposit account for 2 years at 8% per annum. Find the interest she earns and the maturity value of the account.
Banking