Savings Bank Account

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Savings Bank Account

Post by rajathadri on Fri Jul 02, 2010 4:41 pm

Today banks play an important role in our lives. We can deposit or borrow money from banks and transfer money from one place to another safely. Banks provide traveller cheques and foreign exchange to tourists. They also provide lockers to keep our valuables. Banks provide many more useful services such as bill payments, loans for cars, houses, etc., ATM and credit card facilities, etc.

Mostly people use banks for depositing money, for which they first have to open an account. Banks provide the following types of accounts:

(1) Savings bank account

(2) Current bank account

(3) Fixed deposit account

(4) Recurring (or cumulative) deposit account

Example 1:

Amit has a savings account in a bank. The following entries are from his passbook.

Date
Particulars
Withdrawals
Deposits
Balance

Rs
p
Rs
p
Rs
p

June 1
B/F
11700.00

July 9
To cheque
2500.00

July 20
By cash
1925.00

October 11
By cheque
3380.00

November 3
To self
5850.00

November 18
To cheque
1000.00

December 27
By transfer
4000.00


Complete the passbook and calculate the interest from June to December, if the rate of interest is 5% per annum.

Solution:

The completed table is as follows:

Date
Particulars
Withdrawals
Deposits
Balance

Rs
p
Rs
p
Rs
P

June 1
B/F
11700.00

July 9
To cheque
2500.00
9200.00

July 20
By cash
1925.00
11125.00

October 11
By cheque
3380.00
14505.00

November 3
To self
5850.00
8655.00

November 18
To cheque
1000.00
7655.00

December 27
By transfer
4000.00
11655.00


Minimum balance for June = Rs 11700.00

Minimum balance for July = Rs 11125.00

Minimum balance for August = Rs 11125.00

Minimum balance for September = Rs 11125.00

Minimum balance for October = Rs 14505.00

Minimum balance for November = Rs 7655.00

Minimum balance for December = Rs 11655.00

Interest is calculated on the multiples of 10.

Therefore, we obtain

Balance for June = Rs 11700.00

Balance for July = Rs 11120.00

Balance for August = Rs 11120.00

Balance for September = Rs 11120.00

Balance for October = Rs 14500.00

Balance for November = Rs 7650.00

Balance for December = Rs 11650.00

Total balance = Rs 78860.00


Principal for 1 month = Rs 78860.00

Rate of interest = 5%



Thus, the interest earned by Amit from June to December is Rs 328.58.

Example 2:

Mr. Dubey has a savings account in a bank. The entries in his passbook are as follows:

Date
Particulars
Withdrawals
Deposits
Balance

Rs
p
Rs
p
Rs
p

11-02-05
B/F
2723.00

05-03-05
By cash
1500.00
4223.00

25-03-05
To cheque
800.00
3423.00

13-04-05
By cheque
3150.00
6573.00

21-05-05
By transfer
2480.00
9053.00

28-05-05
To self
3000.00
6053.00


Calculate the interest earned by Mr. Dubey for the period ending 31 May’ 05, if he closes the account on 31st May, 2005. The rate of interest is 4% per annum.

Solution:

Minimum balance for February = Rs 2723

Minimum balance for March = Rs 3423

Minimum balance for April = Rs 6573

Minimum balance for May = Rs 0

This is because the interest for the month in which the account closes is not calculated.

Interest is calculated on the multiples of 10. Therefore, we obtain

Balance for February = Rs 2720

Balance for March = Rs 3420

Balance for April = Rs 6570

Balance for May = Rs 0

Total balance = Rs 12710

\ Principal for one month = Rs 12710

Rate of interest = 4%



Thus, the interest earned by Mr. Dubey is Rs 42.37.





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