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Total Interest Formula:
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The Bank Loan Interest Calculator helps borrowers in Bangladesh calculate the total interest paid on a loan over its entire term. It uses the standard formula: Total Interest = (EMI × Number of Months) - Principal Amount.
The calculator uses the formula:
Where:
Explanation: This formula calculates the total interest paid by subtracting the original principal amount from the total amount paid through EMIs over the loan term.
Details: Understanding total interest cost is crucial for financial planning, loan comparison, and making informed borrowing decisions in the Bangladeshi banking context.
Tips: Enter EMI in BDT, number of months as whole numbers, and principal amount in BDT. All values must be positive numbers.
Q1: What is EMI in Bangladeshi banking?
A: EMI (Equated Monthly Installment) is the fixed monthly payment made by a borrower to a lender at a specified date each calendar month.
Q2: How is EMI calculated in Bangladesh?
A: EMI is typically calculated using the formula: EMI = [P × r × (1+r)^n] ÷ [(1+r)^n-1], where P is principal, r is monthly interest rate, and n is number of months.
Q3: Why calculate total interest separately?
A: Knowing the total interest helps borrowers understand the true cost of borrowing and compare different loan offers effectively.
Q4: Are there any hidden charges in Bangladeshi loans?
A: Some loans may include processing fees, insurance premiums, or other charges that are not reflected in this calculation. Always check the loan agreement carefully.
Q5: Can this calculator be used for all types of loans in Bangladesh?
A: This calculator works for fixed-rate loans with constant EMIs. It may not be accurate for floating-rate loans or loans with variable payment structures.