Banking

Recurring or cumulative deposit account is a time deposit scheme in banks or post office to boost
the savings among the people. Under this deposit scheme, a person invests a fixed amount every
month for a specified number of months and on the expiry of this period, the person gets the
amount deposited together with the interest due. The amount received by the investor on the
expiry of the specified period is called maturity value.
Interest on a Recurring Deposit account
p • n • (n + 1) • R
I=
2 • 12 • 100
Maturity Value for a Recurring Deposit account
MV = p • n + I
p • n • (n + 1) • R
MV = p • n +
2 • 12 • 100
I = Simple Interest earned on Recurring Deposit account
p = Amount deposited every month
n = Number of months for which the money is deposited
R = Simple Interest rate per annum
MV = Maturity Value for a Recurring Deposit account

Q.1 Manish opens a Recurring Deposit Account with the Bank of Rajasthan and
deposits ₹. 600 per month for 20 months. Calculate the maturity value of this
account, if the bank pays interest at the rate of 10% per annum.
Answer: ₹. 13,050.00

Q.2 Mrs. Mathew opened a Recurring Deposit Account in a certain bank and deposited
₹. 640 per month for 4½ years. Find the maturity value of this account, if the bank
pays interest at the rate of 12% per year.
Answer: ₹. 44, 064.00

Q.3 Mr. Britto deposits a certain sum of money each month in a Recurring Deposit
Account of a bank. If the rate of interest is of 8% per annum and Mr. Britto gets
₹. 8,088 from the bank after 3 years, find the value of his monthly instalment.
Answer: ₹. 200.00
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THAKUR VILLAGE CENTRAL MALL PRAGATI CHS LINK ROAD S. V. ROAD GOKULDHAM EASE ZONE MALL EVERSHINE NAGAR SUNDER NAGAR
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 Q.4 Mr. Richard has a recurring deposit account in a post office for 3 years at 7.5% p.a.
simple interest. If he gets ₹. 8,325 as interest at the time of maturity, find :
(i) the monthly instalment (ii) the amount of maturity
Answer: (i) ₹. 2,000.00 (ii) ₹. 80,325.00

Q.5 Mohan has a recurring deposit account in a bank for 2 years at 6% p.a. simple
interest. If he gets ₹.1,200 as interest at the time of maturity, find :
(i) the monthly instalment (ii) the amount of maturity
Answer: (i) ₹. 800.00 (ii) ₹. 20,400.00

Q.6 Puneet has a Recurring Deposit Account in the Bank of Baroda and deposits ₹. 140
per month for 4 years. If he gets ₹. 8,092 on maturity, find the rate of interest
given by the bank.
Answer: 10% p.a.

Q.7 Mrs. Geeta deposited ₹. 350 per month in a bank for 1 years and 3 months under
the Recurring Deposit scheme. If the maturity value of her deposits is ₹. 5,565;
find the rate of interest per annum.
Answer: 9% p.a.

Q.8 A recurring deposit account of ₹. 1,200 per month has maturity value of ₹. 12,440.
If the rate of interest is 8% and the interest is calculated at the end of every
month; find the time (in months) of this Recurring Deposit Account.
Answer: 10 months

Q.9 Mr. Gulati has a Recurring Deposit Account of ₹. 300 per month. If the rate of
interest is 12% and the maturity value of this account in ₹. 8,100; find the time (in
years) of this Recurring Deposit Account.
Answer: 2 years

Q.10 Monica had a R.D. Account in the Union Bank of India and deposited ₹. 600 per
month. If the maturity value of this account was ₹. 24,930 and the rate of interest
was 10% per annum; find the time (in years) for which the account was held.
Answer: 3 years

Q.11 The maturity value of a R.D. Account is ₹. 16,176. If the monthly instalment is
₹. 400 and the rate of interest is 8%; find the time (period) of this R.D. Account.
Answer: 3 years

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THAKUR VILLAGE CENTRAL MALL PRAGATI CHS LINK ROAD S. V. ROAD GOKULDHAM EASE ZONE MALL EVERSHINE NAGAR SUNDER NAGAR
MAHAVIR NAGAR MAHAVIR NAGAR IIT INSTITUTE

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 Q.12 Mr. Gupta opened a recurring deposit account in a bank. He deposited ₹. 2,500 per
month for two years. At the time of maturity he got ₹. 67,500. Find :
(i) the total interest earned by Mr. Gupta (ii) the rate of interest per annum.
Answer: (i) ₹. 7,500.00 (ii) 12% p.a.

Q.13 Katrina opened a recurring deposit account with a Nationalised Bank for a period
of 2 years. If the bank pays interest at the rate of 6% per annum and the monthly
instalment is ₹.1,000. Find the : (i) interest earned in 2 years (ii) maturity value
Answer: (i) ₹. 1,500.00 (ii) ₹. 25,500.00

Q.14 Mohit started paying ₹. 800 per month in a 6 year recurring deposit. After 2 years,
he started one more R.D. account in which he deposited ₹. 1,500 per month. If the
bank pays 10% per annum simple interest in both the deposits, find at the end of
6 years which R.D. will give more money and by how much ?
Answer : Second R.D. will pay more by ₹. 11,580.00

Q.15 Mr. Bajaj needs ₹. 30,000 after 2 years. What least money (in multiple of ₹. 5)
must he deposit every month in a recurring deposit account to get required
money at the end of the 2 years, the rate of interest being 8% p.a. ?
Answer: ₹. 1,155.00

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KANDIVALI (E) KANDIVALI (W) KANDIVALI (W) KANDIVALI (W) VILE PARLE (W) GOREGAON (E) GOREGAON (W) MALAD (W) MALAD (W)
THAKUR VILLAGE CENTRAL MALL PRAGATI CHS LINK ROAD S. V. ROAD GOKULDHAM EASE ZONE MALL EVERSHINE NAGAR SUNDER NAGAR
MAHAVIR NAGAR MAHAVIR NAGAR IIT INSTITUTE

93266 96303 / 99670 51544