Cummulative deposit
This query is : Resolved
03 January 2012
Can any one explain me the meaning of " Cummulative Deposit ".
Whether F.D deposited in the Bank for a fixed period can be consider as a Cummulative Deposit.
Whether F.D deposited in the Bank for a fixed period can be consider as a Cummulative Deposit.
CA PARAS BAFNA
(Expert)
03 January 2012
When periodically interest is calculated and it is added with the principal. Next periods interest will be calculated on the total amount.
.
Bank FDs are generally cumulative deposits where interest is added quarterly.
.
P0= Principal I =Interest A= Final Amount
After 1 period A1= P0+I1
AFTER PERIOD 2 A2= A1+I2
AFTER PERIOD 3 A3= A2+I3
(I1= Interest for 1 period(Year/Quarter/month) on P1. If R be the rate of interest I1= A0 X R/100)
.
Bank FDs are generally cumulative deposits where interest is added quarterly.
.
P0= Principal I =Interest A= Final Amount
After 1 period A1= P0+I1
AFTER PERIOD 2 A2= A1+I2
AFTER PERIOD 3 A3= A2+I3
(I1= Interest for 1 period(Year/Quarter/month) on P1. If R be the rate of interest I1= A0 X R/100)
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