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Mathematics of Recurring Deposit (R.D.)

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Topics

  • Definition: R.D. Account
  • Maturity Period:
  • Maturity Value (M.V.):
  • Formula: Equivalent Principal for One Month
  • Formula: Interest on R.D. Account
  • Formula: Maturity Value (M.V.)
  • Examples
CISCE: Class 10

Definition: Recurring Deposit Account (R.D. Account)

A scheme in which a fixed amount is deposited every month for a fixed period.

CISCE: Class 10

Definition: Maturity Period

Total time (in months/years) for which deposits are made.

CISCE: Class 10

Definition: Maturity Value (M.V.)

Total amount received at the end = Total deposits + Interest.

CISCE: Class 10

Formula: Interest on R.D.

\[I=P\times\frac{n(n+1)}{2\times12}\times\frac{r}{100}\]

Months = Years × 12

  • P = Monthly instalment

  • n = Number of months

  • r = Rate of interest (% p.a.)

  • I = Interest

  • M.V. = Maturity Value

CISCE: Class 10

Formula: Total Amount Deposited

Total Deposit = P × n

CISCE: Class 10

Formula: Maturity Value

M.V. = P × n + I

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