While parking funds in financial instruments such as fixed deposits, bonds, and more, you can expect to attract periodic inflows at predetermined rates. This is considered to be the return on the money invested or deposited, also called interest.
For investors, the added interest on the principal investment amount signifies its appreciated value. This makes it useful to understand how this interest is calculated. There are three ways to calculate interest, namely simple interest, compound interest, and equation.
Each of the interest calculation formulas can be used to arrive at the same monthly interest payout for the same investment value. However, interest can also be calculated on a quarterly, bi-annual, or annual basis.
Read on to know more about the interest calculation of ₹2 interest for ₹50,000 per month when booking a fixed deposit.
Trying to figure out the monthly interest on your investment does not have to be complicated. You can conveniently do so using one of the many interest calculation tools online.
However, the calculation of ₹2 interest for ₹50,000 per month allows for an easy understanding of the concept. It also aids in weighing the options of a monthly interest payout vs. a yearly interest payout.
Here are the three ways to estimate the monthly earnings for ₹2 interest for ₹50,000 invested in an FD.
Calculation Method |
Formula |
Illustration |
‘₹2 Interest for ₹50,000 Per Month’ Method |
An interest of ₹2 per month denotes an earning of ₹2 per ₹100, which is 2% per month.
Hence, the yearly interest rate is 2 x 12 = 24%. |
To calculate ₹2 interest for ₹50,000 per month, use the formula
Monthly interest payout = 50,000 x 2/100 = ₹1,000
The total interest earnings on ₹50,000 per month, for a year, is ₹12,000. |
Simple Interest |
I = p × r × t
Here, I = Interest amount p = Principal amount r = Interest rate t = Investment tenor |
To calculate the yearly interest payout:
50,000 * 24/100 * 1 = ₹12,000
Monthly interest: 2,000/12 = ₹1,000
|
Compound Interest
|
[P*(1 + R)^nt] - P
Here, P = Principal amount R = Rate of interest n = Number of periods t = Time period |
To calculate the ₹2 interest for ₹50,000,
[50,000 X (1+24/100)^1*1] - 50,000 = ₹12,000
Monthly interest payout: 12,000 / 12 = ₹1,000
|
The monthly interest receivable on an investment of ₹50,000 is ₹1,000, regardless of the calculation method used. Therefore, the ₹2 interest for ₹50,000 per month formula is a simple calculation method used to arrive at the value of the interest receivable each month.
Once you understand the concept, you can easily compare the return rates on all your investments. While you can use the formulas listed above, manual calculations can lead to mistakes, especially when you are comparing multiple FD terms.
In such cases, it may be better for you to rely on the Bajaj Markets FD calculator. This online tool offers accurate and instant results with just a few inputs from you regarding:
Investment amount
Tenor
Applicable interest rate
This way, you can forecast your FD interest earnings and make smarter investment decisions. Once you decide on an issuer, you can book an FD with ease online on Bajaj Markets.
FAQs on How to Calculate ₹2 Interest for ₹50,000 Per Month
How to calculate interest on a ₹50,000 FD?
Depending on prevailing FD rates, your interest can be calculated using any of the three methods: simple interest, compound interest or equation methods.For instance, say you are depositing ₹50,000 for a tenor of 1 year. Your interest rate will vary depending on the lender. Using the simple interest method for an annual rate of 6%, your return will be ₹3,000.
What percentage is 2 rupee interest?
A ₹2 interest is 2% interest for every ₹100 invested.
What are a few examples of interest from investments and is it treated as income?
Some examples of interest that you get from investments include the gains from savings accounts, FDs, bonds, and more. This interest is considered as income and is taxed as per your tax slab.
Is interest income taxable?
Yes, interest income is taxable. However, there are a few exceptions depending on the limits and sources of income.
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