Feb 252012
 

Due to many number of requests from our readers, we are herewith providing the download links for the various tools provided by us in our post dated 21st Feb 2012.

Tool to find out the rate of Interest from EMI

This tool will find out the rate of Interest given the Loan Amount, EMI & Tenure (Both Flat & Diminishing Rate)


Tool to find out flat rate from Diminishing Rate

This tool will convert the Flat rate of Interest to Diminishing Rate of Interest given the Amount of Loan,Rate of Interest and Tenure


Tool to find out Diminishing Rate from Flat rate

This tool will find out diminishing rate of interest from the flat rate given the Loan amount , Rate of Interest and Tenure


Hope these tools are useful to you.

Click here send your comments/suggestions

 

Feb 212012
 

Very often we come across advertisements which offer lower rate of interest rate on loans. Many times, the lending institutions resort to advertising rate of interest with a asterisk mark and the asterisk mark will say that the rate of interest is a Flat rate. Some lenders advertise their loan products at Diminishing rate of interest. As a wise investor/borrower understanding both these types of Interest calculations will help you make correct decisions.

Flat rate method

Flat rate of interest is a simple rate of interest calculated on the full loan amount without giving effect to the amount of loan repaid.

Diminishing/Reducing Balance Method

On the other hand, diminishing/reducing rate of interest gives effect to the amount of loan repaid.

We will take the following calculation :-

Loan Amount              Rs 100000/-

Tenure                         5 Years

Rate of Interest           10% p.a.

Flat rate Method

Interest Amount          =          Rs. 50000/-

(100000 x 10% x 5)

EMI Amount              =          Rs. 2500/- per month for 5 years

(Rs. 150000 / 60 months)

 

Diminishing/Reducing method 

EMI Amount              =          Rs. 2125/-

Total Amount paid      =          Rs. 127500/-

Interest Amount          =          Rs. 27500/-

The difference in Interest amount under both the methods is on account of the fact that under reducing/diminishing balance method, the principal repaid every month is taken into account for Interest/EMI calculation and as a result, the total interest amount under reducing balance is lesser than that of the interest as per Flat method.

We provide herewith the following tools for various calculations :-

1)      Tool to Find out rate of Interest from EMI

2)      Flat rate to Diminishing rate covertor

3)      Diminishing rate to Flat rate convertor

Hope these tools will serve as an aid to make your decisions.

Click here to send your enquiry/feedback

Worksheet to find out Rate of Interest from EMI      


Flat rate to Diminishing Rate Convertor 

Diminishing Rate to Flat rate Convertor 


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