An RD is a scheme in which you deposit a fixed amount every month for a predetermined tenure and earn interest on each installment. So, how to calculate RD interest? The key inputs are: your monthly deposit (R), the annual interest rate (r), and the tenure (t). Because banks typically compound interest quarterly for RDs, the effective rate for each quarter is calculated accordingly.
How to Calculate Recurring Deposit Interest?
The commonly used formula is: M=R×((1+i)^n-1)/(1-(1+i)^(-1/3) )
where:
M= maturity amount (total value at the end)
R= monthly instalment
i= interest rate per quarter (annual rate divided by 400)
n= number of quarters in the tenure (for example, 1 year = 4 quarters)
For example: if you invest Rs. 5,000 each month for 12 months (n = 4 quarters) at an annual rate of 8% (so i=8/400=0.02per quarter), you plug into the formula to find the maturity value. Using the calculator simplifies it and gives you both the total amount invested and the interest earned.
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Howdy! I calculated my recurring deposit investment a week back. You can calculate the recurring deposit interest through the online calculator that is mentioned below. You have to enter the instalment amount, rate of interest and period of investment to generate the maturity amount.
Here is the
link
to the calculator.
I hope you’ll be able to find out your recurring deposit interest through the above process.
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Read More How To Deposit Advance Partial Payment Of LIC HFL Loan Online Through Netbanking?
How to Calculate Interest in an RD?
Unnati
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2023-11-08T08:50:39+00:00 2023-11-09T10:44:24+00:00Comment
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