For detailed explanation, please refer Reinvestment Deposit Scheme
The total interest receivable from a recurring deposit is calculated as below
Identify the compounding period
Calculate the simple interest using regular formula (pti/100) for each month and add the cumulative interest to the invested amount based on the compounding period.
where,
i - Rate of Interest(%)
t - Total number of periods(months)
p - Monthly recurring amount(currency)
Below is an example for quarterly compounding for a monthly recurring deposit of 1000 at 6% annual interest
Monthly recuring Deposit | Interest | Remarks |
---|---|---|
1000 | 5 | 1000*6÷100÷12=5 |
1000 | 10 | 2000*6÷100÷12=10 |
1000 | 15 | 3000*6÷100÷12=15 |
1030 | 20.15 | (4000+5+10+15)*6÷100÷12=20.15 |
1000 | 25.15 | and so on |
1000 | 30.15 | |
1075.45 | 35.52725 | |
1000 | 40.52725 | |
1000 | 45.52725 | |
1121.582 | 51.13516 | |
1000 | 56.13516 | |
1000 | 61.13516 | |
1168.405 | 66.97719 |
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