LEARN MATH STEP BY STEP THROUGH VERY EASY PROCESS

INTRODUCTION OF BANKING

**BANKING –**

**Banking is
a most essential part of our daily life. In the bank almost all the people
place their hard cash money to the bank for future use as per their planning to
expense. There are lots of terminology is used in Banking system such as- Savings,
Fixed deposit, Recurring deposit, Double Recurring deposit, Interest, Tenure,
Maturity Value, Loans, Equal Monthly Installment (EMI), Cumulative Term Deposit
(CTD) scheme, etc. **

**Here we
will learn, different different calculation for different different
terminology. Hopefully all of you can learn all the calculation related to the
banking.**

**Recurring
Deposit (RD) or Cumulative Time Deposit (CTD) Scheme –**

**Under this
scheme, with full concern an investor deposits a fixed amount every month for a
specific number of months and on expiry or at the end of this chosen period
(called Maturity Period) by investor, he gets
the amount deposited by him together with the interest due to him. The amount received by the investor on the
expiry of the specified period is called maturity value.
**

**Calculation
of Interest on Recurring Deposit –**

**Suppose $ P
per month is deposited each month for ‘n’ months at R% per annum. Then, $ P
deposited in the ‘n’th month will earn interest for 1 month, that deposited in
(n – 1)th month will earn interest for 2 months, and so on, while the sum
deposited in the first month will earn interest for ‘n’ months. **

**Thus we have –**

**Equivalent
principal for one month = $ [P X (1 + 2 + 3 + ……………. + n)]**

** n(n + 1)**

** = $ [P X ------------]**

** 2**

**Thus, the
interest can be calculated using the formula**

** n(n + 1) 1 R**

** S.I. =
$ [P X ---------- X ------ X -------]**

** 2 12 100**

**Maturity
value (M.V) = (P X n) + I**

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