RD calculation formula: Let’s consider an example to understand this better, You invest a principal amount of 500 for a period of 60 months at an interest rate of 6% and it is compounded quarterly. For Example, SBI provides interest rate of 8% on a fixed deposit of ₹ 1 lakh for a period of 5 years with quarterly compounding of interest. RD Calculation Formula. Interest Calculated - Interest will be compounded periodically. Compounding Frequency. Question 1. Where. P = Principal amount or the installment amount R = Interest rate in decimal, convert interest rate into decimal by dividing it by 100 The savings have to be deposited into the account every month. r represents an annual interest rate Recurring/Regular Deposit - Amount of deposit, deposit is made at beginning of each period. Recurring Deposit is calculated using the compound interest formula. Future Value of Multiple Deposits To calculate the future value of a monthly investment, enter the beginning balance, the monthly dollar amount you plan to deposit, the interest rate you expect to earn, and the number of years you expect to continue making monthly deposits… Here is the RD maturity formula which guides you to calculate the maturity value on your own. R = Rate of Interest. T = Time Period. ( (1+i) n -1) / (1- (1+i) -1/3) where, A = Maturity amount. Here is the formula for calculating maturity value recurring deposit given by Indian Banks' Association, which is a simplification of the formula for future value of annuity with monthly payments and quarterly compounding:-. is the simple interest, P is the money deposited per month, n is the number of months for which the money has been deposited and r is the simple interest rate percent per annum. A stands for final amount procured. Remember to make the appropriate adjustments to interest rate and the number of payments. Divide the interest rate by the number of periods in a year (four for quarterly, twelve for monthly), and multiply the number of periods (p) by the same number. Interest Rate - Annual interest rate. Where M = Maturity amount. We calculate Recurring deposit using the compound interest formula which is: A = P (1 + r/n) ^ nt. Deposit Frequency - How often to make a deposit. Which is the formula used to calculate compound interest on Recurring Deposits? Of course the … As per the Recurring deposit maturity formula to known the rate of interest divide the interest (i) by 400. The interest on your savings is compounded quarterly. The maturity amount here is the sum of the principal amount and the interest earned over the investment tenure. Formulae Based Questions. N = Number of Times i.e. P stands for principal or the amount that has been invested initially. 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