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Monthly Deposit Simple-Interest Estimate

Estimate equal monthly deposits with simple interest on each deposit’s remaining time, without quarterly or monthly interest compounding.

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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Where results are editable, change one to solve backwards. Lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Twelve deposits of 500 at a 6 percent annual simple rate contribute 6,000 and earn 195, giving 6,195 at the end of month twelve.

Simple interest = monthly deposit × n × (n + 1) × annual rate/24

Worked example

Enter these known values and leave the other values blank.

Deposit at the start of each month
500 USD
Term in whole monthly deposits
1 yrs
Annual simple interest rate
6 %
Total contributed
6000 USD
Estimated simple interest
195 USD
Deposits plus simple interest
6195 USD

Assumptions and limitations

  • There are n equal deposits at the beginning of consecutive months. The first earns simple interest for n months and the last for one month.
  • Interest is not added to principal during the term. This shortcut does not reproduce a bank’s compounded recurring-deposit product, dated accrual or tax deductions.
  • The number of monthly deposits is a positive integer; the annual rate is nonnegative and below 100 percent, preserving the captured upper rate limit.
  • At zero rate, interest is zero. Zero interest alone cannot determine deposit amount or term; supply contribution information as well.

Common questions

Is this the exact maturity value of an Indian bank RD?

No. It is an explicitly simple-interest model. A bank may compound interest and apply date, rounding and tax rules that differ.

Why does the formula use n(n + 1)/2?

That is the sum of the months each beginning-of-month deposit earns interest: n + (n − 1) + … + 1.

References

Bookify selects the positive duration root instead of the captured negative root. Bookify permits zero interest and requires a positive whole number of monthly deposits with nonnegative interest and maturity amounts.

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