Q.Which earns more compound interest over 1 year: depositing ₹60,000 as a Fixed Deposit at 8% per annum compounded quarterly, or depositing the same total amount as twelve Recurring Deposit instalments of ₹5,000 each at 8% per annum? Find the interest earned in each case.

Compute the FD maturity value and interest with the FD formula, and the RD maturity value and interest with the RD formula, for the same total outlay and the same nominal rate, then compare.

FD: $A=60{,}000(1.02)^4=64{,}945.93$, interest $=4{,}945.93$. …

Both options involve the same total money set aside, ₹60,000, at the same nominal annual rate, 8%, over the same 1-year period — but they earn different interest because of when the money is actually on deposit.

Option 1 — Fixed Deposit ($P=60{,}000$, $r=8\%$, $t=1$, compounded quarterly):

Option 2 — Recurring Deposit ($P=5{,}000$ per month, $r=8\%$, $n=12$ months, total instalments $=5{,}000\times12=60{,}000$):

$\text{Interest} = 62{,}600-60{,}000 = ₹2{,}600$ …

A common misconception is assuming that because both schemes quote the "same 8% rate" and involve "the same ₹60,000," they must earn the same interest — this overlooks that an FD's principal is on deposit in full from the very start, while an RD's instalm …