Intrest calculation

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 April 2012 Dear Sir/Madam,

I want to know i can calculate interest on current a/c and Cash credit a/c
Regards
Rajakumar.R

Dintakurthi Tirumala

Dintakurthi Tirumala (Expert)

07 April 2012 It would be calculate on daily closing balance as per the interest rate as on date. Interest rate is different from bank to bank and account to account also based on the bank norms and credit rating of the account.
Formula to calculate interest is
Per day Interest = closing balance for that day * ROI as on date/365.

For example:

1) if the closing balance on 7-4-2012 is Rs.1,00,000 and the interest rate as on the date as per bank norms is 14.75% then interest for one day i.e 7-4-2012 is
1,00,000*14.75%/365= Rs.40.41

If the same balance is continuing for 3 days i.e upto 9-4-2012 then interest for the three days i.e from 7-4-4012 to 9-4-2012 is Rs.40.41*3=121.23

If the same balance is on 8-4-2012 but rate of interest on that day is 15% then interest for one day i.e 8-4-2012 is
Rs.1,00,000*15%/365=41.09
and the interest for 7-4-2012 to 8-4-2012 is Rs.40.41+41.09=Rs.81.5

I think you understood with this example how to calculate interest and what is the interest amount for a particular period. If you have any doubt regarding this please post your doubt i will clarify you because i explained only the concept of calculation of Interest.
OM SAI SRI SAI JAI JAI SAI

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