Rate of interest in RD
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The rate of interest in RD of 5 years term in post office is now 8.4% per annum. After completion of 5 years of a pass book of Rs.100/month you will get an amount of Rs 7465.10. My question is, how it has been calculated? Can anyone supply it?
@saij: I am attaching an Excel sheet which shows the calculation with the above data for your kind perusal.
Please note that Indian Banks calculate interest for recurring deposit on quarterly compound basis.Nemo is right-
@ Torkona: Thanks, your version is easier to understand.
Actually, a difference was always occuring with the result of my calculation. Now it is understanable. Because I was calculating considering the compound interest monthly. But it is actually quarterly. So result was differing.
Do not try the above calculation by hand or using calculator only. You may do it but, at your own risk.
Always use excel sheet.Actually I was using the formula A=Px(x^n -1)/(x-1), where x=1+r/1200, where P=deposit per month, n=no of month, r=rate of interest per year.
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