An apartment association lets its members pay 11 months of their monthly maintenance fee in lumpsum, while the usual option of monthly payments also exists. The treasurer claims that placing the 11-month lumpsum in a bank fixed deposit yields the same sum as 12 months of regular payment, as assessed at the year-end (assuming the monthly payments are not reinvested by the treasurer). What's the fixed deposit's rate of interest?

Question

Option 1: 9.09%

Option 2: 5.5%

Option 3: 8.33%

Option 4: None of these

AfterBoards · Accepted Answer

The answer is '9.09%'. View full solution:

BMSAT Kozhikode (QA) PYQs

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