# Online Simple interest Calculator

Online Web Code Test |
Online Image Picker |
Online Color Picker

# Simple interest calculator

Simple interest calculator.

Online Web Code Test |
Online Image Picker |
Online Color Picker

Simple interest calculator.

Online Web Code Test |
Online Image Picker |
Online Color Picker

- Home
- GST Calculator
- Compound Interest
- Effective Interest Rate
- Simple Interest Calculator
- VAT Calculator

Goods and Services Tax or GST refers to the indirect tax levied on the supply of goods and services. From July 1, 2017, GST came up as single taxation system in India and replaced all the indirect taxes in the country. The Central Government passed the GST Act in the Budget Session in 2017 that was approved by the Parliament on March 29, 2017. Some of the indirect taxes that were abolished were Central Excise Duty, VAT, Entry Tax and Octroi.

GST is a comprehensive tax levied on the manufacture, sale and consumption of goods and services in the country. Different small and large organizations are required to have a GST Identification Number to get registered under GST policy. When any kind of sales transaction is made within states (Inter-state), Integrated GST is charged. And for any intra-state sales, Central GST and State GST are levied.

State GST (SGST): It is collected by State Government

Central GST (CGST): It is collected by Central Government

Integrated GST (IGST): It is collected by Central Government for inter-state transactions and imports

Union Territory GST (UTGST): It is collected by Union Territory Government

With the unified system of taxation, it is now possible for taxpayers to know the tax levied at different points for various goods and services under the GST regimen. For the calculation of GST, the taxpayer should know the GST rate applicable to various categories. The different slabs for GST are 5%, 12%, 18% and 28%.

GST calculation can be explained by simple illustration :

If a goods or services is sold at Rs. 1,000 and the GST rate applicable is 18%, then the net price calculated will be = 1,000+ (1,000X(18/100)) = 1,000+180 = Rs. 1,180.

For calculating GST, a taxpayer can use the below mentioned formula :

Add GST

GST Amount = ( Original Cost * GST% ) / 100

Net Price = Original Cost + GST Amount

Remove GST

GST Amount = Original Cost – (Original Cost * (100 / (100 + GST% ) ) )

Net Price = Original Cost – GST Amount

GST inclusive amount refers to the total value of the product after including the GST amount in the original value of the product. The tax is not charged separately from the customer.

GST Exclusive amount refers to the value of the product by subtracting the GST amount from the GST Inclusive value of the product.

The calculator will take all the information you've entered to give you a future balance and a projected breakdown of both monthly and yearly figures to show you how your savings or investment might change over time.

Compound interest, or 'interest on interest', is calculated using the compound interest formula. By using our calculator, you can work out an appropriate regular saving strategy to maximise your future wealth. Compound interest is the concept of adding accumulated interest back to the principal sum, so that interest is earned on top of interest from that moment on.

The formula used in the compound interest calculator is A = P(1+r/n)^{(nt)}

A = the future value of the investment

P = the principal investment amount

r = the interest rate (decimal)

n = the number of times that interest is compounded per period

t = the number of periods the money is invested for

Compound interest is the total amount of interest earned over a period of time, taking into account both the interest on the money you invest (this is called simple interest) and the interest earned or charged on the interest you've previously earned.

The compound interest formula is: A = P (1 + r/n)^{nt}

The compound interest formula solves for the future value of your investment (A). The variables are: P – the principal (the amount of money you start with); r – the annual nominal interest rate before compounding; t – time, in years; and n – the number of compounding periods in each year (for example, 365 for daily, 12 for monthly, etc.).

Compound interest takes into account both interest on the principal balance and interest on previously-earned interest. Simple interest refers only to interest earned on the principal balance; interest earned on interest is not taken into account. To see how compound interest differs from simple interest, use our simple interest vs compound interest calculator.

Compound interest has dramatic positive effects on savings and investments.

Compound interest occurs when interest is added to the original deposit – or principal – which results in interest earning interest. Financial institutions often offer compound interest on deposits, compounding on a regular basis – usually monthly or annually.

The compounding of interest grows your investment without any further deposits, although you may certainly choose to make more deposits over time – increasing efficacy of compound interest.

Invest early – As with any investment, the earlier one starts investing, the better. Compounding further benefits investors by earning money on interest earned.

Invest often – Those who invest what they can, when they can, will have higher returns. For example, investing on a monthly basis instead of on a quarterly basis results in more interest.

Hold as long as possible – The longer you hold an investment, the more time compound interest has to earn interest on interest.

Consider interest rates – When choosing an investment, interest rates matter. The higher the annual interest rate, the better the return.

Don't forget compounding intervals – The more frequently investments are compounded, the higher the interest accrued. It is important to keep this in mind when choosing between investment products.

The Effective Annual Interest Rate (EAR) is the interest rate that is adjusted for compounding over a given period. Simply put, the effective annual interest rate is the rate of interest that an investor can earn (or pay) in a year after taking into consideration compounding.

Effective Annual Interest Rate

EAR can be used to evaluate interest payable on a loan or any debt or to assess earnings from an investment, such as a guaranteed investment certificate (GIC) or savings account.

The effective annual interest rate is also known as the effective interest rate (EIR), annual equivalent rate (AER), or effective rate. Compare it to the Annual Percentage Rate (APR) which is based on simple interest.

Effective Annual Rate formula - (1 + i/n)^{n} – 1

Where:

i = Stated annual interest rate

n = Number of compounding periods

The effective annual interest rate is an important tool that allows the evaluation of the true return on an investment or true interest rate on a loan.

The stated annual interest rate and the effective interest rate can be significantly different, due to compounding. The effective interest rate is important in figuring out the best loan or determining which investment offers the highest rate of return.

In the case of compounding, the EAR is always higher than the stated annual

Simple interest is a calculation of interest that doesn’t take into account the effect of compounding. In many cases, interest compounds with each designated period of a loan, but in the case of simple interest, it does not. The calculation of simple interest is equal to the principal amount multiplied by the interest rate, multiplied by the number of periods.

For a borrower, simple interest is advantageous, since the total interest expense will be less without the effect of compounding. For a lender, compound interest is advantageous, as the total interest expense over the life of the loan will be greater.

A = P(1 + rt)

Where:

A = Total Accrued Amount (principal + interest)

P = Principal Amount

I = Interest Amount

r = Rate of Interest per year in decimal; r = R/100

R = Rate of Interest per year as a percent; R = r * 100

t = Time Period involved in months or years

From the base formula, A = P(1 + rt) derived from A = P + I and since I = Prt then A = P + I becomes A = P + Prt which can be rewritten as A = P(1 + rt)

Use this simple interest calculator to find A, the Final Investment Value, using the simple interest formula: A = P(1 + rt) where P is the Principal amount of money to be invested at an Interest Rate R% per period for t Number of Time Periods. Where r is in decimal form; r=R/100; r and t are in the same units of time.

The accrued amount of an investment is the original principal P plus the accumulated simple interest, I = Prt, therefore we have:

A = P + I = P + (Prt), and finally A = P(1 + rt)

A = P(1 + rt)

P = A / (1 + rt)

r = (1/t)(A/P - 1)

R = r * 100

t = (1/r)(A/P - 1)

VAT (value added tax) is a type of indirect consumption tax imposed on the value added to goods or services, specifically during different stages of the supply chain, which may include production, wholesale, distribution, supply, or any other stages that add value to a product. VAT is commonly used by governments around the world as one of their main sources of revenue, and accounts for approximately 20 percent of worldwide tax revenue. It is the most common consumption tax in the world and is enforced in more than 160 countries. All countries that are part of the European Union (EU) are legally required to enforce a minimum VAT rate, and since its introduction in the 20th century, European VAT rates have consistently increased. The U.S. is the only developed country in the world that doesn't use VAT.

To calculate VAT, you need to:

1. Determine the net price (VAT exclusive price). Let's make it €50.

2 Find out the VAT rate. It will be 23% in our example. If expressed in percentages, divide it by 100. So it's 23 / 100 = 0.23.

3. To calculate the VAT amount: multiply the net amount by VAT rate. €50 * 0.23 = €11.50.

4. To determine the gross price: multiply the net price by VAT (again, we'd get €11.50) rate and then:

5. Add it to the VAT exclusive price so you get the VAT inclusive. €50 + €11.50 = €61.50.

While all countries follow a general VAT blueprint, there are a lot of differences in the finer details of their respective implementation. The VAT in one country will not be the same as the VAT in another. Differences between countries include the taxes imposed on specific goods or services, whether the taxes apply to imports or exports, and rules regarding filing, payment, and penalties. For example, in the Philippines, senior citizens are exempt from paying VAT for most goods and some services that are for personal consumption. In China, beside the standard VAT rate, there is a reduced rate that applies to certain products such as books and oils. Many countries do not impose a VAT for certain goods ranging from education to foodstuffs, health services, and government charges.

A GST, or goods and services tax, can be the alternative name of VAT in some countries such as Australia and Canada. In addition, the terms are commonly used interchangeably (sometimes even with "sales tax"), even though GST and VAT in their respective countries can differ tremendously. No country has both a GST and a VAT.

As seen in the example above, VAT functions differently from sales tax, and is a bit more complex. Sales tax is only imposed once when the consumer of the product pays the vendor. VAT is superior to sales tax in regards to preventing tax evasion or malpractice because taxes are applied during the entire process of production and distribution, rather than as a single instance at the end. However, because of the intricate paper trail that VAT requires, it tends to be costly to administer compared to sales tax.

Even though VAT is imposed at multiple instances for any good or service, double taxation (tax paid on tax) does not occur. Because VAT is only imposed on any value added, any tax applied during preceding stages can be deducted, preventing a cascading effect (as shown in the example). On the other hand, double taxation can happen with sales tax.

Sales tax and VAT are similar in that rates are often expressed as a percentage of the price. In general, retail sales tax rates are lower than VAT rates, 4-10 percent as opposed to 14-25 percent. Contrary to popular belief, VAT does not tax businesses more in order to reduce the tax burden on the end consumer; businesses would simply raise prices to compensate. The end total in tax revenue generally remains the same, even if there are differences regarding when and how often taxation occurs.

Statistics have shown that VAT affects lower income earners more disproportionately than sales tax because of the regressive nature of VAT. However, this can be offset by the proper implementation of progressive regulations, such as seen in European models of VAT.