Interest calculator
Simple and compound interest on a credit sale. Same arithmetic as the in-app calculator.
How we calculate
Simple interest is principal × rate × time / 100, with time in years (days ÷ 365). Compound interest uses monthly compounding: A = P(1 + r/n)^(n×t) with n = 12. On ₹10,000 at 18 percent for a year, simple interest is ₹1,800. The compound amount is a little more because each month’s interest starts earning. Quote simple interest unless you both wrote down compounding.
Show the same number the app will show
The signed-in ledger uses this arithmetic. If you text a customer a figure from this page, it should match the interest screen in the owner app on the same principal, rate and days. That is the point of a public calculator: the person who will not install anything can still see how you got there.
This is a planning tool, not legal advice. Agree the rate when you sell. Do not invent a higher one because the due is old. Confirm anything that will go on an invoice with your accountant.
Frequently asked questions
What is simple interest on shop credit?
Principal × rate × time / 100, with time in years. Days are divided by 365. On ₹10,000 at 18 percent for 365 days the simple interest is ₹1,800.
What is compound interest here?
Interest on interest, compounded monthly: A = P(1 + r/n)^(n×t) with n = 12. The page shows the amount including that interest, not only the extra.
Which number should I quote a customer?
Simple interest, unless you both agreed compounding in writing. Compounding on kirana udhar is unusual and needs a clear conversation first.
How are days counted?
Calendar days divided by 365. A 30-day month is not used. Leap years are ignored so the same inputs always produce the same rupees.
Is this the same as the in-app calculator?
Yes. The signed-in interest screen uses this arithmetic. A number you show a customer on this page should match the app on the same inputs.
Can I use it for a bank FD or a personal loan?
You can type the numbers. Banks often use a 365 or 360 day year and different compounding. Treat this as a check, then read the passbook.
Does it add GST on the interest?
No. If your accountant says interest on credit sales is taxable in your case, compute GST separately with the GST calculator.
What if the days field is zero?
Simple interest is zero. Compound amount stays the principal. That is a sanity check, not a bug.
Does anything get uploaded?
No. The calculator runs in the browser. We never see the principal.
How is this different from EMI?
Interest answers “what does this balance cost over these days.” EMI answers “what equal monthly payment finishes this principal.” Use EMI when there is a tenure.
Can I charge 36 percent because they are late?
Only if they agreed that rate when they took the goods. A rate you invent on collection day will not survive a polite conversation, let alone a dispute.
Is this legal advice?
No. It is a planning tool. A court will look at what you both agreed, not at this page.
Will it work without a network?
Once the page has loaded, the arithmetic is local. A dead tower does not change the result.