**WHY INTEREST CALCULATION OF CREDIT NEED TO KNOW ?**

The calculation used the bank loan interest will determine the size of installments of principal and interest payable on loans Debtor received from the bank. Understanding of the various interest calculations will help the debtor in making the decision to take the most profitable credit sesuaidengan financial capacity.

**HOW TO CALCULATE INTEREST ?**

Some of the methods used by banks in calculating interest include :

- Flat Rate

and mortgage interest every month same magnitude.

**example :**

A bank gives a credit of Rp6.000.000, -for 6 months to the debtor C with an interest rate 12% per year flat rate.

Total Interest = Pl x i x n

Interest per month = Pl x i / 12

Pl = loan ceiling

i = interest rate per year

n = credit period (years)

Installment Debtors Table C - Flat Rate

Months Balance principal installments installments of interest Number of installments 1 6.000.000 1.000.000 60.000 1.060.000 2 5.000.000 1.000.000 60.000 1.060.000 3 4.000.000 1.000.000 60.000 1.060.000 4 3.000.000 1.000.000 60.000 1.060.000 5 2.000.000 1.000.000 60.000 1.060.000 6 1.000.000 1.000.000 60.000 1.060.000 6.000.000 360.000 6.360.000

**Effective (Sliding Rate)**

Interest calculation is done every end of the period installment payments. In this calculation, Loan interest is calculated from the final balance of each month (debit tray) so that interest debtor is paid monthly decline. Thus, the amount of installments paid debtor will be getting smaller every month.

**example :**

A bank gives a credit of Rp6.000.000,- for 6 months to the debtor C with an interest rateInterest per month = SA * i / 12

12% per year rate of sliding

SA = end of period balance

i = interest rate per year

Installment Debtors Table C - Sliding Rate

Months | Balance | principal installments | installments of interest | Number of installments |

1 | 6.000.000 | 1.000.000 | 60.000 | 1.060.000 |

2 | 5.000.000 | 1.000.000 | 50.000 | 1.050.000 |

3 | 4.000.000 | 1.000.000 | 40.000 | 1.040.000 |

4 | 3.000.000 | 1.000.000 | 30.000 | 1.030.000 |

5 | 2.000.000 | 1.000.000 | 20.000 | 1.020.000 |

6 | 1.000.000 | 1.000.000 | 10.000 | 1.010.000 |

6.000.000 | 210.000 | 6.210.000 |

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