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# Rate of interest in RD

Home Forums General Discussion Rate of interest in RD

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• #68583

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?

#77224

@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.

#77223

Nemo is right-

#77226

@ Torkona: Thanks, your version is easier to understand.

#77242

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.

#77247

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.

#77274

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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