1(iii)
A person deposited ₹500 per month in a recurring deposit account for one year at $r$% per annum. The rate of interest is revised to $2r$%. The interest earned by the person compared to the original amount of interest will be:
- (a)one-fourth
- (b)unchanged
- (c)half
- (d)double
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By formula,
Interest = $P \times \frac{n(n + 1)}{2 \times 12} \times \frac{r}{100}$
In this formula, the interest is directly proportional to the rate of interest, as the principal (P) and the number of months ($n$) remain unchanged.
When the rate is revised from $r$% to $2r$%, the rate becomes double.
∴ The interest earned also becomes double.
Hence, option 4 is the correct option.