Suppose I got a loan of Rs.1lakh at 18% diminishing interest rate for 3 years then what would be flat rate and how to calculate. Pls give the formula
How to calculate flat rate when given reducing rate?
First compute the total interest outgo using WDV method.
Divide the result by 3.
Then divide the resultant figure with prinicpal loan amout and multiply by 100.
You have got the flat rate for your loan.
CA. Deepak Bholusaria
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