• # Help me with your mathematics knowledge

Dear members, especially members expert in mathematics,

I am very poor in mathematics. I have a problem to solve. Kindly help me with your formulas.

In the year 1984, I wanted to help one of my relatives with some sum. I told him that I would give him Rs. 25/- per month for life long as pension commencing from the month of July 1984. He did not accept it saying that it was like a beggar's money. After a few months, he was ready and asked me to pay the sum. I refused and said that I do not wish to pay beggars money.

If I had started depositing Rs. 25/ per month w.e.f. July 1984 in a bank, what would be the sum accumulated till todate (May 2021)? It is about 36 years and 10 months. (442 months)

What would be the amount of compound interest accumulated at the rate of 8 percent per annum?

What would be the total amount held in my bank account
• There are some formulas for calculating the maturity amount of the RD but doing manually for such a long time is a cumbersome process. So, we have to take help of the programs/applications/online calculators which are available online for this purpose. Only problem is most of these are for 10 years so they canon be used for 36 years. What I will suggest is to use the online calculators for 10 years and then keep that maturity amount in fixed deposit of another 10 years and so on till 36 years are reached. One thing is there that interest rates had been fluctuating during the past and we can take an average interest of say 8% throughout the past 36 years. Let us calculate now for an amount of Rs 25 per month -
(1) Using the online calculator I get for the period July 1984 to July 1994 a maturity amount of Rs 4604. If we keep it in FD then today in 2021 it will become Rs 39625.
(2) For the RD for the period 1994 to 2004 the maturity amount will be Rs 4604. If we keep that in FD then today in 2021 it will become Rs 17856.
(3) For the RD for the period 2004 to 2014 the maturity amount will be Rs 4604. If we keep that in FD then today in 2021 it will become Rs 8045.
(4) For the RD for the period 2014 to 2021 the maturity amount will be Rs 2822.

Let us now add all of them to get the final result = 39625 + 17856 + 8045 + 2822 = Rs 68348.

There are online calculators available in many sites and one can do this oneself to verify this. There could be some other ways to do it and I have used one of the methods. The final value will vary if we take the actual interest rates prevailing at that time. As per my knowledge of past interest rates they were quite high but gradually came down to todays low rates of 5-6%. So, our assumption of taking average as 8% is alright.

Knowledge is power.

• Umesh,
Thanks a lot. Very nice of you for calculating the amount.
Other expert members can workout and give us the formula.

No life without Sun