The post office RD has quarterly compounding. How is it calculated?
Devina Chatterjee, Kolkata
From April 1, 2017, interest rate on a post office RD is 7.2 per cent per annum (quarterly compounded). So, Rs 10 RD will fetch Rs 723.14 at the end of the five year tenure. The calculation of RD returns is same as that for compound interest, but you will need to put the compounding factor to quarterly rest when using the compound interest formulae.
