Recurring deposit calculator

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Recurring deposit calculator

Recurring deposit calculator

A recurring deposit calculator is a tool that calculates the maturity value and interest earned on a recurring deposit account. A recurring deposit is a type of savings account in which a person deposits a fixed amount of money at regular intervals, usually monthly, for a predetermined period of time. The interest rate on the account is fixed for the duration of the deposit.

Here are the steps to use a recurring deposit calculator:

  1. Enter the monthly deposit amount, the duration of the deposit in months, and the annual interest rate into the calculator.
  2. Click the “Calculate” button to find the maturity value and interest earned.

Here is the formula for calculating the maturity value of a recurring deposit:

M = P * [((1 + r/n)^(n*t) – 1) / (r/n)]

where M is the maturity value, P is the monthly deposit amount, r is the annual interest rate, n is the number of times interest is compounded per year, and t is the duration of the deposit in years.

Let’s say we have a recurring deposit account with a monthly deposit of $100, an annual interest rate of 5%, and a duration of 2 years. To use a recurring deposit calculator, we would follow these steps:

  1. Enter the values for the monthly deposit, duration in months, and annual interest rate into the calculator: P = 100, t = 2, and r = 0.05.
  2. Choose the frequency of interest compounding. In this example, let’s assume interest is compounded monthly, so n = 12.
  3. Click the “Calculate” button to find the maturity value and interest earned.

The recurring deposit calculator would give us the following results:

  • Maturity value: M = P * [((1 + r/n)^(nt) – 1) / (r/n)] = 100 * [((1 + 0.05/12)^(122) – 1) / (0.05/12)] = $2,493.77 (rounded to two decimal places).
  • Interest earned: Interest = M – (P * t * 12) = $493.77.

Therefore, the maturity value of the recurring deposit is $2,493.77 and the interest earned is $493.77.

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