1. Title 11.

Example 3
2. Aims of the banking system 12. Example 4
3. Objectives of the banking 13. Example 5
system 14. Conclusion
4. Broader aspect of learning 15. Acknowledgement
outcome 16. Thank you
5. Introduction
6. Main functions of Bank
7. Recurring deposit Account
8. Computing maturity value
and interest(formulae)
9. Example 1
10. Example 2
1. To establish as an institution for maximizing profits and to conduct
overall economic activities.
2. To collect savings or idle money from the public at a lower rate of
interests and lend these public money at a higher
rate of interests.
3. To create propensity of savings amongst the people.
4. To motivate people for investing money with a view to bringing
solvency in them .
5. To create money against money as an alternative for enhancing
supply of money.
6. To build up capital through savings.
7. To expedite investments.
8. To extend services to the customers.
9. To maintain economic stability by means of controlling money market
1. To promote and develop in India sound and progressive banking
principles, practices and conventions and to contribute to the
developments of creative banking.
2. To promote education and knowledge of the law and practice of
banking.
3. To give financial assistance to individuals or bodies
4. To assist, advise and guide all members and the smaller members in
particular on all their needs, difficulties and problems of growth,
development and working.
5. To develop and implement new ideas and innovations in banking
services, operations and procedures.
6. To collect, classify and circulate statistical and other information on the
structure and working of the banking system.
In this module of banking we will mainly learn the application of the
formulae to calculate :
1.Maturity value
2. Interest

INTEREST= MATURITY
PXNX(N+1)XR VALUE=
2X12X100 PN+I
The business of receiving, safeguarding and lending money
is called Banking. In general, people who have spare
money do not keep it with them to avoid the risk of losing
it by theft etc. They deposit this spare money in a bank.
In the bank, the money is safe as well as it fetches
interest on it. On the other hand, some people need
money to start a business or expand their business. So,
they borrow money from bank at a nominal interest on it.

Thus, a bank is an institution which carries on the

business of taking deposits and lending money. The rate
of interest charged by the bank from its borrowers is
usually higher than what it pays to depositors.
In addition to money-taking and money-lending the banks also perform various
other functions and almost every individual and every section of the society deals
with banks in one way or the other. Some of the main functions of the bank are
as follows:

1 Receiving money from depositors- Different bank have different schemes to

attract people who keep their money in bank of their choice or bank which gives
them maximum returns on their deposits.

2. Lending money on demand – Banks take deposits at a lower rate of interest

and lend it at a higher rate; but they also perform certain other functions for
benefit of a needy.

3.Providing other useful services to society- A maximum no. of people nowdays,

get their salaries through banks. Banks help in transferring money from one place
to other.
Under this scheme, a depositor chooses a specifies amount
and deposits that amount every month for a fixed period of
time, chosen by him or her during that time. This period
may vary from 3 months to 10 years. At the expiry of this
period the depositor is paid a lump sum amount. The
maturity value of R.D account includes the amount
deposited by the account holder together with interest
compounded quarterly at a fixed rate. This rate is fixed by
the Reserve Bank of India and is revised from time to time.
Let a sum P Rs. Be deposited every month in a bank for n months. If the rate
of interest be r% per year, the interest on the whole deposit is calculated by
using formula:

I= P * N(N+1)* R
2 X 12 * 100
Since, the total sum deposited in n months
= sum deposited every month x number of months
=PxN

MATURITY VALUE IS:

PN+1
= P X N + P * N(N+1) * R
2 X 12 * 100
GIVEN:
P= 200 Rs.
T= 36 MONTHS
RATE=11%
MATURITY VALUE=?

SOL: BY USING THE FORMULA OF INTEREST

200 X 36 X 37 X 11
2 X 12 X 100`
INTEREST= 1221Rs.

SUM DEPOSITED= 200 X 36= 7200Rs.

MATURITY VALUE= 7200+1221= 8421Rs.(Ans)
GIVEN:
P=?
T=12 MONTHS
MV=6455Rs.
RATE 14%

SOL: BY USING FORMULA OF MATURITY VALUR

6455= P X 12+ P X 12 X 13 X 14
2 X 12 X 100
WE GET 6455/12.91 RS.= 500 RS.
THEREFORE THE MONTHLY INSTALMENT IS=500Rs.(Ans)
GIVEN:
MATUEITY VALUE=11364Rs.
TIME =4 YEARS
P=200Rs.
R=?

SOL: USING THE FORMULA OF MATURITY VALUE

11364= 200 X 48 + 200 X 48 X 49 X R
2 X 12 X 100
WE GET
1764/196=9
THEREFORE RATE= 9%(ANS)
GIVEN :
TIME=N MONTHS
P= 600RS.
MATURITY VALUE=24930RS.
RATE=10%

SOL:
USING THE FORMULA OF MATURITY VALUE:
24930= 600 X N + 600 X N X (N+1) X R
2 X 12 X 200
AFTER SIMPLFYING THE ABOVE WE GET A QUADRATIC EQUATION:
5N^2+5N+1200N=49860
AFTER FURTHER SIMPLIFICATION WE GET
N= -277 AND N=36
SINCE TIME CANNOT BE POSSIBLE IN NEGATIVE AND HENCE THE TIME WILL BE
36 MONTHS OR 3 YEARS(ANS)
GIVEN
P= 1000RS.
RATE= 12%
TIME = 24MONTHS
I=?

SOL:
BY USING THE FORMULA OF INTEREST
I= 1000 X 24 X 25 X 12
2 X 12 X 100
THEREFORE THE INTEREST WE GET AFTER SIMPLIFICATION IS
12 X 25= 300 RS.(ANS)
The business of receiving money from depositors (or account holders),
safeguarding, and lending money to businesses or individuals is called banking.
Types of Accounts: There are many types of accounts but from a course
perspective, we will look at the following accounts:
1. Savings Bank Account .
2. Recurring Deposit Accounts
 Recurring Deposit Account- In this type of deposit, the account holder
deposits a specified amount in the account every month for a fixed period of
time. It could be three months to say 10 years. The time period is decided by
the bank.
 Saving Bank Account- A person can deposit and withdraw money at will. The
person gets a certain interest on the deposits, which could change with a
change in market conditions.
Firstly, I would like to express my heartfelt gratitude to my
math's teacher Kirti mam for her sincere guidance and advice
in completing my work successfully. Also, I appreciate her
patience in guiding me through the process of completing
this math project work.

I’d also like to thank our principal Rev. Brother Gubendrin for
giving me this wonderful opportunity to work on this project.

Lastly, I want to thank my parents, family members and

friends for helping me to finalize this project within the
limited time.