I’ve been learning lessons from coursera to know more about finance lately. Some of the essential knowledge I’ve procured from extensive reading on the topic include the formulas for interest rate calculations and Return on Intvestment calculations.
An example for calculating interest could be; Procurement of a loan amounting 20 Lakhs. Compounded annually at the rate of 10.75% for 5years.
Formula to use; FV= PV(1+I)^N
Here, FV is the future value,
PV is the present value,
I is the interest rate and N is the number of periods to be compunded.

So how much will I pay in total after 5years?
By substituting the values we get,
FV= 20,00,000(1+10.75%)^6
FV= 36,90,561
This means that one should be able to payback that amount (36,90,561) within 5years to avail 20,00,000 as loan proceeds. Another fact to note is that you could deduct the principal of 20,00,000 from FV ie, 36,90,561 to get the interest amount to be paid.

Hope this eases your interest calculations.

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