1. find mv amount
and rate

2. Recap I = To find simple interest we use the following formula:
Number of years
Interest
Principal
Rate of interest
Amount = Principal + Interest

3. Fixed Deposits and Recurring Deposits
Banks, post offices and many other financial institutions accept deposits from
public at varying rates of interest. People save in these institutions to get regular
periodical income.
Different saving schemes are offered by these financial institutions.
Few of those schemes are (i) Fixed Deposit and (ii) Recurring Deposit
1. Fixed Deposit
In Fixed Deposit (F.D), people invest a quantum of money for specific periods.
The interest on Fixed Deposit is calculated using simple interest method
Where P is the monthly installment , r is the rate of interest , n is number of
years of deposit
Amount = Principal + Interest

4. Recurring Deposit
In Recurring Deposit (R.D.), the depositor deposit a fixed amount regularly
every month over a period of years in the bank or in the post office.
The bank or post office repays the total amount deposited together with the
interest at the end of the period.
The interest on Recurring Deposit is calculated using simple interest method.
Where P is the monthly installment, r is the rate of interest , n is number of
months of installment.
Total deposit made = P x n
Total Amount due at maturity (A) = Total deposit made + Interest

5. Example 1: Tharun makes a deposit of Rupees two lakhs in a bank for 5 years. If
the rate of interest is 8% per annum, find the maturity value.
Solution Given: Principal deposited(P) = Rs 2,00,000, n = 5 years, r = 8% P. A
Type of deposit : fixed deposit
To Find : Maturity value(A)
= Rs 8000
Maturity value(A) = Principal + interest
=2,00, ,000 = Rs 2,80,000
Ans:- Maturity value(A) after 5 years is Rs 2,80,000

6. Example 2:- Vaideesh deposits 500 at the beginning of every month for 5 years
in a post office. If the rate of interest is 7.5%, find the amount he will receive at
the end of 5 years.
Solution Given:-Amount deposited every month, P = Rs 500, n= 5 years , r=7.5%
Type of deposit : recurring deposit
To Find :- Amount(A)
n has to be in number of months, therefore n = 5 years = 5 × 12 = 60 months
Rate of interest, r = 7.5
Total deposit made = P x n = 500 × 60 = Rs 30,000
Period for recurring deposit(N)

7. = Rs 5,718.75
Total Amount due at maturity (A) = Total deposit made + Interest
= 30, ,718.75
= Rs 35,718.75
Ans:- Total Amount due at maturity is Rs 35,718.75

8. Solution Given:- Maturity Amount(A) = Rs 13,830, P = 200, n = 5 years
Example 3:- Vishal deposited 200 per month for 5 years in a recurring deposit
account in a post office. If he received Rs 13,830 ,Find the rate of interest.
Solution Given:- Maturity Amount(A) = Rs 13,830, P = 200, n = 5 years
Type of deposit : Recurring deposit
To Find:- Rate of interest (r)
n has to be in number of months, therefore n = 5 years = 5 × 12 = 60 months
Amount Deposited = P x n = 200 × 60 = Rs 12000

9. Total Amount due at maturity (A) = Total deposit made + Interest
13830 – = 305 x r
1830 = 305 x r
Ans:- Rate of interest (r) = 6%

10. TRY THESE
Ponmani makes a fixed deposit of Rs 25,000 in a bank for 2 years. If the
rate of interest is 4% per annum, find the maturity value.
2. Imran deposits Rs 400 per month in a post office as R.D. for 2 years. If the
rate of interest is 12%, find the amount he will receive at the end of 2 years.