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Please provide formula for Intrest calculation on Daily / Monthly reducing balance?

April 26, 2017Business calculation Finance Formula intrest reducing

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Please provide formula for Intrest calculation on Daily / Monthly reducing balance?

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It can be explained like this. Jan. 1, 2001……… you take a loan of Rs.10,000 The repayment will be in 100 instalments + interest at 12% Then Feb. 1 – repayment will be Rs.100 + int 100 = 200 (int. for 1 month 10,000 X 12% X 1 by 12 = 100) March 1 – repay 100 + int 99 = 199 (int. for 1 month 9,900 X 12% X 1 by 12 = 99) Apr 1 – repay 100 + int 98 = 198 May 1 – repay 100 + int 97 = 197 Jun 1 – repay 100 + int 96 = 196 like this now on Apr. 1, 2007 (after 75 months), you will pay 100 + 25 = 125 …. If you want to know the daily reducing balance, then replace 1/12 by 1/365, you will get int for a day and from there yu can calculate the repayment+ int payable. If you want to pay in EMI, then there are so many sites (all banks) which provide online calculator to compute EMI (equated monthly instalment) for a given principal, int rate and no. of months. !!!