Q1
What is a recurring deposit?
ADepositing a fixed amount monthly, earning interest
BA one-time deposit only
CA type of loan
DA type of tax
ICSEClass 10 (ICSE)MathematicsCh 2 · Topic 2
Practice and Revision - Banking (Recurring Deposit Accounts)
Let us practise and revise what we learned about banking (recurring deposit accounts). A recurring deposit (RD) account involves depositing
Core concept
The maturity value formula for RD is: MV = P×n + P×n×(n+1)/2 × (r/12) × (1/100), where P is monthly deposit, n is months, r is annual interest rate.
How it works
Interest earned equals the maturity value minus the total amount deposited (P×n), showing the extra money gained through interest.
Why it matters
RD accounts encourage regular saving habits, making them popular for people wanting to save a fixed amount consistently over time.
Key detail
Understanding RD calculations helps us make informed decisions about savings plans and understand how banks calculate returns on deposits.
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Quick notes
• RD maturity value formula involves P, n, r.
• P=monthly deposit, n=months, r=annual rate.
• Interest = Maturity Value - (P×n).
• This shows extra money gained.
• RD encourages regular saving habits.
• It's popular for consistent saving.
• Understanding this aids savings decisions.
• It shows how banks calculate deposit returns.