How to calculate 2 rupees interest for 20,000 per month

When choosing a fixed deposit to invest in, one of the most important factors you must consider is the interest rate offered by the issuer. The interest rate is predetermined, and you can use it to calculate how much returns you would earn at the end of the tenor. 

There are two main formulas that allow you to calculate the total interest receivable: simple interest and compound interest. Moreover, you can also use the ‘₹2 interest for ₹20,000 per month’ method to determine the interest receivable at the end of the investment horizon. 

Just like the ‘₹1 interest’ method, you can use the ‘₹2 interest for ₹20,000’ method to find out your FD returns. In other words, if you earn ₹2 interest for ₹20,000 principal amount per month, you can use this method to find the total interest receivable:

Here is the table showcasing different formulas and illustrations to find your FD returns if the initial investment that you make is ₹20,000:     

So, if you invest ₹20,000 as an initial investment in an FD providing ₹2 interest for two years, you can earn a monthly interest of ₹400. Alternatively, if you choose a compounding FD, your interest may be higher if it is compounded more than once yearly.

However, if you calculate FD interest manually, you may find the process complex and cumbersome. In addition to this, even a small manual error can cause huge variations in the end result. 

Hence, it is advisable to use Bajaj Markets’s FD calculator to determine the amount of interest receivable. This online tool is not just quick but also easy to use. All you have to do is enter the principal amount, interest rate, and the tenor to determine your FD returns.