Straight answers for everyday decisions
Loans, savings and everyday money decisions, explained with real numbers.
Showing 4 posts with label Money. Show all posts
Short answer: Paying only the minimum keeps your card in good standing but charges interest on the rest. In our example, a 50,000 balance at 3.5% a month takes almost 11 years and 91,021 in interest to clear on minimum payments alone.
How card interest is charged, why the minimum payment keeps you in debt for years, and a worked example.
Short answer: EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1). Borrowing 5,00,000 at 12% for 3 years costs 16,607 a month. Quoted as a flat rate, the same 12% costs nearly twice the interest.
The EMI formula with worked examples in rupees, and how to compare flat and reducing-balance interest before you sign.
Short answer: Divide 72 by the yearly rate to get the years needed to double. At 8% it takes about 9 years; at 6%, about 12. It works for inflation too: at 6% inflation, prices double in about 12 years.
A one-line mental shortcut for growth, interest and inflation, with how accurate it really is.
Short answer: Compound interest earns interest on your interest. On 1,00,000 at 8% for 5 years, simple interest pays 40,000, while interest compounded every quarter pays 48,595.
How banks calculate interest on fixed deposits, why compounding frequency matters, and how to compare offers properly.