# What is the meaning of the following statement regarding fixed deposit?

In the Development Credit bank,for a duration of 15-45 days,if i deposit Rs.2 lakhs,i will get interest in the rate of 4.25%and the deposit is compounded annually.if i choose the duration to be 15 days then how much interest will i get and when will i get it?please give the detailed calculations.

## 2 Replies to “What is the meaning of the following statement regarding fixed deposit?”

1. mukesh says:

for 15 days also rate is 4.25%, so interest=(200000×4.25X15)/(100×365) Rs. i.e. Rs.349/-

2. SEBASTIAN says:

The interest you get is (200000 X 4.25 X 15) / (100 X 365) = Rs.349

and the interest you will get on maturity, ie. completion of 15 days along with principal.

Interest compounded annually means if you opt for a term beyond one year, on the completion of one year, your interest is added to the principal, and at the time of next interest calculation, this new principal will be taken into account and thereby you could get more interest. If you deposit for 15 days, the clause of compounding is not applicable for you.