Frequently asked questions
These answers cover the calculators on this site and the formulas behind EMI, interest, FD, GST and percentages.
How is EMI calculated on a loan?
EMI depends on the loan amount, the monthly interest rate and the number of instalments. The standard formula is EMI = P x r x (1+r)^n / ((1+r)^n - 1), where r is the annual rate divided by 12 and by 100. Each EMI is part interest and part principal, and the interest share falls as the loan runs down.
What is the difference between simple and compound interest?
Simple interest is charged only on the original principal for the whole period, while compound interest is charged on the principal plus the interest already added. Compounding can be yearly, quarterly, monthly or daily, and more frequent compounding gives a slightly higher final amount. For savings this works in your favour, and for loans it works against you.
How do I add GST to a price or remove it from an inclusive price?
To add GST, multiply the base price by the GST rate and add that to the price. To find the base price hidden inside a GST-inclusive amount, divide the total by one plus the rate written as a decimal. The GST portion is then the total minus that base price.
How do I calculate percentage increase or decrease between two numbers?
Subtract the old value from the new value, divide the result by the old value, then multiply by 100. A positive result is an increase and a negative result is a decrease. The same method gives the percentage difference whenever you compare a starting figure with a later one.
What is the difference between an FD and an RD calculator?
A fixed deposit calculator assumes one lump sum invested at the start and grown with compound interest until maturity. A recurring deposit calculator assumes a fixed amount paid every month, so each instalment earns interest for a different length of time. Both estimate the maturity value, but the RD spreads your investment across the whole term.