FinTech StartUp .com : Recurring Deposit with Rs 1000

Starting a Recurring Deposit with Rs 1000 at 10% interest rate for 12 months assuming Paying capacity of an individual to be 10,000 per month and adding a new RD every month of 1000 Rupees for another 12 months.

*2010

January- 1000(RD No. 1)

February 2000(RD No. 1+2)

March 3000(RD No. 1+2+3)

April 4000(RD No. 1+2+3+4)

May 5000(RD No. 1+2+3+4+5)

June 6000(RD No. 1+2+3+4+5+6)

July 7000(RD No. 1+2+3+4+5+6+7)

August 8000(RD No. 1+2+3+4+5+6+7+8)

September 9000(RD No. 1+2+3+4+5+6+7+8+9)

October 10,000(RD No. 1+2+3+4+5+6+7+8+9+10)

November 10,000(1000 Each For 10 RDs)

December 10,000(1000 Each For 10 RDs)

Total Amount Recieved in 2010=13,200

Maturity Month Of 10 RDs

1st RD- Jan To Dec = 12,000+10% interest rate=13,200

2nd RD-Feb To Jan 2011=12000+1200=13200

3rd RD-Mar To Feb 2011=13200

4th RD-April To Mar 2011=13200

5th RD-May To April 2011=13200

6th RD-April To May 2011=13200

7th RD-May To June 2011=13200

8th RD-June To July 2011= 13200

9th RD-July To Aug 2011=13200

10th RD-Aug To Sep 2011=13200

Start Of new RD in next year of 12,000 which will be the maturity amount of the previous 10 RDs and starting of RD of 1000 from your pocket

*2011

Jan-12,000 + 1000

Feb-12,000 + 1000

Mar-12000 + 1000

April-12000 + 1000

May-12000 + 1000..............Till December

Total Amount Recieved in year 2011=1,44,000+14,400(10% interest) + 12,000+1200(10% interest)

=1,84,800

Now the amount recieved at the end of the year 2011 From maturity of 2 RDs will be reinvested in opening 2 new RDs for 12 months 1 for 12000 and another of 1000 that would be 156000

*2012

Jan-12000+1000

Feb-13000

Mar-13000..........December-13000

*2013

Amount recieved of maturity of previous RDs=1,58,000+13200=1,84,000

At the end of 3yrs = 382,800

At the end of 5yrs=3,82,800*5=435,600

At the end of 10yrs=382,800*10=19,14000

Total Money Invested in 3yrs=65,000+39,000+1,56,000=2,60,000

Amount Recieved at the end of 3years=3,82,800

Aishwarya Oza [MBA Fin ]