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Interest rate calculation problem

CA Harshvardhan Bhardwaj (M.com, CA,CS,CMA) (114 Points)

25 December 2013

Dear Member ,

I have problem on Interest rate calculation in below case ! please suggest me with suitable solution.

Problem: Mr. A ask me to give a loan of Rs. 10000. I agree to give him loan on following term,

Initially i give Rs.8500 after deducting Rs. 1500. and the repayment terms are Mr. A give Rs 100 per day for upto 100 day, i.e total Rs 10000.

what is the effective rate of interest annually?

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1 Replies

Samrendra (Asst. Manager- Internal audit) (221 Points)
Replied 06 January 2014

Dear Harsh,

Approximate 121%.

Days	Principle	Interest	Payment	Balance
0	8,500.00	-	-	8,500.00
1	8,500.00	28.18	100.00	8,428.18
2	8,428.18	27.94	100.00	8,356.12
3	8,356.12	27.70	100.00	8,283.82
4	8,283.82	27.46	100.00	8,211.28
5	8,211.28	27.22	100.00	8,138.50
6	8,138.50	26.98	100.00	8,065.48
7	8,065.48	26.74	100.00	7,992.22
8	7,992.22	26.49	100.00	7,918.71
9	7,918.71	26.25	100.00	7,844.96
10	7,844.96	26.01	100.00	7,770.97
11	7,770.97	25.76	100.00	7,696.73
12	7,696.73	25.52	100.00	7,622.25
13	7,622.25	25.27	100.00	7,547.52
14	7,547.52	25.02	100.00	7,472.54
15	7,472.54	24.77	100.00	7,397.31
16	7,397.31	24.52	100.00	7,321.83
17	7,321.83	24.27	100.00	7,246.10
18	7,246.10	24.02	100.00	7,170.12
19	7,170.12	23.77	100.00	7,093.89
20	7,093.89	23.52	100.00	7,017.41
21	7,017.41	23.26	100.00	6,940.67
22	6,940.67	23.01	100.00	6,863.68
23	6,863.68	22.75	100.00	6,786.44
24	6,786.44	22.50	100.00	6,708.93
25	6,708.93	22.24	100.00	6,631.17
26	6,631.17	21.98	100.00	6,553.16
27	6,553.16	21.72	100.00	6,474.88
28	6,474.88	21.46	100.00	6,396.35
29	6,396.35	21.20	100.00	6,317.55
30	6,317.55	20.94	100.00	6,238.49
31	6,238.49	20.68	100.00	6,159.17
32	6,159.17	20.42	100.00	6,079.59
33	6,079.59	20.15	100.00	5,999.75
34	5,999.75	19.89	100.00	5,919.64
35	5,919.64	19.62	100.00	5,839.26
36	5,839.26	19.36	100.00	5,758.62
37	5,758.62	19.09	100.00	5,677.71
38	5,677.71	18.82	100.00	5,596.53
39	5,596.53	18.55	100.00	5,515.08
40	5,515.08	18.28	100.00	5,433.37
41	5,433.37	18.01	100.00	5,351.38
42	5,351.38	17.74	100.00	5,269.12
43	5,269.12	17.47	100.00	5,186.59
44	5,186.59	17.19	100.00	5,103.78
45	5,103.78	16.92	100.00	5,020.70
46	5,020.70	16.64	100.00	4,937.34
47	4,937.34	16.37	100.00	4,853.71
48	4,853.71	16.09	100.00	4,769.80
49	4,769.80	15.81	100.00	4,685.61
50	4,685.61	15.53	100.00	4,601.15
51	4,601.15	15.25	100.00	4,516.40
52	4,516.40	14.97	100.00	4,431.37
53	4,431.37	14.69	100.00	4,346.06
54	4,346.06	14.41	100.00	4,260.47
55	4,260.47	14.12	100.00	4,174.59
56	4,174.59	13.84	100.00	4,088.43
57	4,088.43	13.55	100.00	4,001.99
58	4,001.99	13.27	100.00	3,915.25
59	3,915.25	12.98	100.00	3,828.23
60	3,828.23	12.69	100.00	3,740.92
61	3,740.92	12.40	100.00	3,653.32
62	3,653.32	12.11	100.00	3,565.44
63	3,565.44	11.82	100.00	3,477.25
64	3,477.25	11.53	100.00	3,388.78
65	3,388.78	11.23	100.00	3,300.02
66	3,300.02	10.94	100.00	3,210.96
67	3,210.96	10.64	100.00	3,121.60
68	3,121.60	10.35	100.00	3,031.95
69	3,031.95	10.05	100.00	2,942.00
70	2,942.00	9.75	100.00	2,851.75
71	2,851.75	9.45	100.00	2,761.21
72	2,761.21	9.15	100.00	2,670.36
73	2,670.36	8.85	100.00	2,579.21
74	2,579.21	8.55	100.00	2,487.76
75	2,487.76	8.25	100.00	2,396.01
76	2,396.01	7.94	100.00	2,303.95
77	2,303.95	7.64	100.00	2,211.59
78	2,211.59	7.33	100.00	2,118.92
79	2,118.92	7.02	100.00	2,025.95
80	2,025.95	6.72	100.00	1,932.66
81	1,932.66	6.41	100.00	1,839.07
82	1,839.07	6.10	100.00	1,745.17
83	1,745.17	5.79	100.00	1,650.95
84	1,650.95	5.47	100.00	1,556.42
85	1,556.42	5.16	100.00	1,461.58
86	1,461.58	4.85	100.00	1,366.43
87	1,366.43	4.53	100.00	1,270.96
88	1,270.96	4.21	100.00	1,175.17
89	1,175.17	3.90	100.00	1,079.07
90	1,079.07	3.58	100.00	982.65
91	982.65	3.26	100.00	885.90
92	885.90	2.94	100.00	788.84
93	788.84	2.62	100.00	691.46
94	691.46	2.29	100.00	593.75
95	593.75	1.97	100.00	495.72
96	495.72	1.64	100.00	397.36
97	397.36	1.32	100.00	298.68
98	298.68	0.99	100.00	199.67
99	199.67	0.66	100.00	100.33
100	100.33	0.33	100.00	0.66
		1,500.66	10,000.00