Kritika needs ₹ ten lakh after 5 years. What least money (in multiples of 100) should be deposited per month in a recurring deposit so that she gets at least the required amount after 5 years? The rate of interest paid by the bank is 12 % per annum.

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₹12800

₹11800

₹10800

₹11100

answer is A.

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Detailed Solution

It is given that,

M a t u r i t y v a l u e = 1000000, R = 12 % p . a ., T = 112 years

The formula for Maturity value is

= P × n + P × n n + 1 2 × R T 100

,
where P = deposit amount, n = number of months, R= rate per annum and T= time.
Number of months is

5 × 12 = 60

. Therefore, the Maturity value can be calculated as,

⇒ 1000000 = P × 60 + P × 60 × 60 + 1 2 × 12 × 1 100 × 12 ⇒ 1000000 = 60 P + 18.3 P ⇒ 1000000 = 78.3 P ⇒ P = 12771.39 ≈ 12800

As a result, the smallest amount (in multiples of 100) that should be placed in a recurring deposit every month is 12800.
The correct option is 1).

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