How to Use the RD Calculator
Using the RD interest calculator is simple and requires just a few inputs to estimate your returns and get an accurate projection of your final maturity amount. The steps are as follows:
- Visit the website and navigate to the RD calculator tool.
- Enter the monthly deposit amount.
- Select the investment tenure.
- Enter the applicable interest rate.
The Recurring Deposit interest calculator will instantly display your estimated returns and total maturity value
Formula to Determine RD Maturity
See, recurring calculators allow even those who do not have the knowledge of complex mathematics to determine the maturity amount. Still, if you want to understand how the calculator works, here is the formula that forms the foundation for calculating RD earnings:
M = P × [(1 + r/n)^(nt)]
Here, M is the maturity value
P is the monthly deposit
r is the annual interest rate
n is compounding frequency
t is the tenure in years or the duration left till maturity
Let’s say you deposit ₹7,000 every month in the RD for a year and earn interest at a rate of 8.5% compounded quarterly:
Here,
P= ₹7,000
r= 8.5%= 0.085
n= 4
Placing these values in the RD calculator formula,
-
Maturity value for the first month, i.e., t= 12months = 1 year
M = 7000 × [(1 + .085/4)^ (4*1)] = ₹7,614.24
-
Maturity value for the second month, i.e., t= 11/12 years
M = 7000 × [(1 + .085/4)^ (4*11/12)] = ₹7521.88
-
This will continue till the twelfth month, where t= 1/12 years
M = 7000 × [(1 + .085/4)^ (4*1/12)] = ₹7049. 37
Adding all these values together,
M= ₹7,614.24 + ₹7521.88 + …………….. + ₹7049. 37 = ₹87,941.23
This is the total maturity amount you will receive at the end of the year.
RD helps you save with discipline, ULIP helps you grow your savings
