Banking Class 10 ICSE — Bansal Chapter 2
Banking class 10 ICSE, chapter 2 of the Bansal Mathematics textbook, teaches how banks operate and how to find the maturity value of a recurring deposit account. The chapter moves from definitions to the interest formula, then applies it in five solved patterns. You will also see which question types appear in board exams and how to practise them.
ICSE Class 10 Mathematics Bansal Chapter 2 Banking PDF
What is inside Chapter 2
7 pages · 4 sections · 5 worked examples · 30 exercise questions
| Section | Title |
|---|---|
| 2.1 | Introduction |
| 2.2 | Types of Accounts |
| 2.3 | Recurring Deposit Account (R.D. Account) |
| 2.4 | Computing maturity value of a Recurring Deposit Account |
- EXERCISE 2(A): 9 questions
- EXERCISE 2(A): 10 questions
- EXERCISE 2(B): 11 questions
2.1 Introduction
The chapter defines banking as the business of receiving, safeguarding and lending money. A bank holds deposits from people with spare cash and lends to those who need it. People deposit money to keep it safe and to earn interest. Borrowers pay interest to the bank in return.
The rate a bank charges borrowers is usually higher than the rate it pays depositors. That gap is how a bank earns. This simple idea carries through every question in the chapter.
The book names three main functions of a bank:
- Receiving money from depositors. Banks run different schemes to attract people who want a good return.
- Lending money on demand. Banks also give loans at concessional rates to small farmers, shopkeepers and others who need help.
- Providing other useful services to society. Banks transfer money, collect fees and bills, provide lockers, and issue ATM, debit and credit cards.
These functions explain why almost everyone deals with a bank. The next section narrows the focus to one popular account type.
2.2 Types of Accounts
Banks offer many deposit schemes to attract savers. This chapter does not survey all of them. The book states plainly that it will discuss only the Recurring Deposit Account, the most popular and commonly used account.
Why this account? People who want to save regularly find it convenient. The scheme links directly to section 2.1. The bank takes a fixed deposit each month, safeguards it, and later lends money from such deposits at a higher rate.
So the rest of the chapter treats one scheme in detail. Section 2.3 explains how the account works. Section 2.4 shows how to compute its maturity value using the interest formula.
The chapter does not cover savings accounts, fixed deposits or current accounts. For this chapter, the Recurring Deposit Account is the whole story.
2.3 Recurring Deposit Account (R.D. Account)
Under this scheme, a depositor chooses a fixed amount and deposits it every month for a set period. The period is chosen when the account opens and may run from 3 months to 10 years. At the end of the period, the bank pays a lump sum called the maturity value.
The maturity value has two parts. It includes the total amount the depositor paid in, plus the interest earned on it. The interest is compounded quarterly at a fixed rate set by the Reserve Bank of India. That rate is revised from time to time.
This section sets up the variables used in the formula. P is the monthly instalment. n is the number of months the account runs. r is the annual rate of interest in per cent.
Quarterly compounding matters here. The bank adds interest four times a year, not once. The formula in section 2.4 builds this in through the factor \frac{n(n+1)}{2 \times 12}.
2.4 Computing maturity value of a Recurring Deposit Account
This is the working heart of the chapter. Suppose ₹P is deposited every month for n months at r% per year. The bank calculates interest on the whole deposit with this formula:
I = P \times \frac{n(n+1)}{2 \times 12} \times \frac{r}{100}
Why does the formula look like this? The first instalment earns interest for almost the whole period, while the last earns almost none. The term \frac{n(n+1)}{2} gives the sum of the first n natural numbers. That models the months each instalment is held. Dividing by 12 turns the annual rate into a monthly basis.
The maturity value adds the principal to the interest:
M.V. = P \times n + I
Here P \times n is the total sum deposited, since P is paid in each of the n months.
Worked example pattern
Deposit ₹750 per month for 18 months at 8% per annum. First find the interest.
I = 750 \times \frac{18 \times 19}{2 \times 12} \times \frac{8}{100} = 750 \times \frac{342}{24} \times \frac{8}{100} = ₹855
Sum deposited = 750 \times 18 = ₹13,500.
Maturity value = 13,500 + 855 = ₹14,355. The bank pays ₹14,355 at the end of 18 months.
The five question patterns
The textbook works five patterns across its solved examples. Each uses the same two formulas.
| Question type | Formula to use |
|---|---|
| Find the maturity value | M.V. = P \times n + I |
| Find the monthly instalment | Unitary method with an assumed ₹100 |
| Find the rate of interest | Rearrange I = P \times \frac{n(n+1)}{2 \times 12} \times \frac{r}{100} |
| Find the time in months | Solve the quadratic, reject the negative root |
Common mistakes to avoid
| Mistake | Correct rule |
|---|---|
| Using years instead of months | Convert first: 2 years = 24 months |
| Using n instead of n(n+1) | The formula needs the product n(n+1) |
| Forgetting the 12 in the denominator | The annual rate must be split across 12 months |
| Keeping the negative root of the quadratic | n is a time in months, so it must be positive |
Board exam years in this chapter
The solved examples and exercises in this textbook carry exam years. The years shown include 2001, 2005, 2006, 2007, 2008, 2010, 2011, 2012, 2013, 2014 and 2015. This tells you the question patterns recur. Practising them prepares you for the same types on your paper.
What to practise from this chapter
The book gives you two exercises to work through. EXERCISE 2(A) appears in two recorded blocks: 9 questions on the first page of the exercise and 10 questions on the next page. EXERCISE 2(B) holds 11 questions. Work through 2(A) before 2(B), since 2(A) builds the basic substitutions first.
Each question follows one of the five patterns from section 2.4. If a sum asks for the maturity value, apply M.V. = P \times n + I directly. If it asks for the monthly instalment, use the unitary method. If it asks for time or rate, solve the quadratic and reject the negative root.
For more practice in the same book, see Chapter 3 on Shares and Dividend. You can also browse the Class 10 Maths book hub and the Compound Interest chapter. For the syllabus and specimen papers, check the official CISCE website.
Frequently asked questions
What is the formula for the maturity value of a recurring deposit account?
Maturity value is the sum deposited plus interest: M.V. = P \times n + I. The interest is I = P \times \frac{n(n+1)}{2 \times 12} \times \frac{r}{100}, where P is the monthly instalment, n the number of months, and r the annual rate per cent.
How do I convert years into months when using n in the recurring deposit formula?
Always convert the time to months before substituting. Two years becomes 24 months, and 3½ years becomes 42 months. The formula needs n in months because the deposit is made monthly.
Why do we reject the negative value of n when solving for time?
n counts months, and a period of time cannot be negative. When the quadratic gives two roots, you keep only the positive one. Then convert the months to years if the question asks for years.
How do I find the monthly instalment when the maturity value is given?
Assume a ₹100 monthly instalment and compute the maturity value it gives. Then scale by the unitary method. If ₹100 yields ₹1,291 and the actual maturity value is ₹6,455, the instalment is \frac{100}{1291} \times 6455 = ₹500.
What does interest compounded quarterly mean for an R.D. account?
It means the bank adds interest to the account four times a year. The recurring deposit formula already builds this in through the monthly factor. So you do not adjust r separately in the standard questions.
Reference: ICSE Class 10 Mathematics textbook material, chapter 2: Banking — CISCE-aligned.
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