1. What is Interest and Repayment Calculation?

The interest and repayment calculation helps you understand how much extra you're paying beyond the principal amount (interest) and what your regular payments will be (repayment) for a loan or mortgage.

2. How Does the Calculator Work?

The calculator uses these simple formulas:

Where:

• \( Total\ Paid \) — The total amount you'll pay back including interest
• \( Principal \) — The original loan amount you borrowed
• \( Loan\ Term \) — Duration of the loan in months

Explanation: The interest shows the cost of borrowing, while the repayment amount helps you budget your monthly payments.

3. Importance of Interest Calculation

Details: Understanding your interest helps you compare loan options, assess affordability, and make informed financial decisions.

4. Using the Calculator

Tips: Enter the total amount you'll pay back, the original loan amount, and the loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between interest rate and interest amount?
A: Interest rate is the percentage charged on the loan, while interest amount is the actual dollar amount you'll pay.

Q2: How can I reduce my total interest paid?
A: You can reduce total interest by choosing a shorter loan term, making extra payments, or securing a lower interest rate.

Q3: Why is my repayment amount higher than my principal divided by months?
A: Because repayment includes both principal and interest components - you're paying back more than you borrowed.

Q4: Does this calculator work for any type of loan?
A: Yes, it works for mortgages, personal loans, auto loans, etc., as long as you know the total repayment amount.

Q5: How accurate is this calculator?
A: It provides basic estimates. For exact figures, consult your loan agreement or lender, as some loans may have variable rates or fees.