Faedah & APR

Simple vs Reducing Balance Interest Calculator

Many consumer loans advertise a flat simple interest rate that sounds low but ends up significantly more expensive than a reducing balance loan. Compare both methods side-by-side.

⚙️ Input Parameters Privacy: Client-Side Only

📊 Keputusan Pengiraan

Interest Difference Saved
$0
Compared to Flat Interest
Flat Interest Total Cost
$0
Reducing Balance Total Cost
$0

📐 How This Calculation Works

This tool uses standard periodic compound interest and amortization algorithms. For reducing balance amortization, installments are computed using the formula:

M = P × [ r(1 + r)^n ] / [ (1 + r)^n – 1 ]

📚 Panduan Berkaitan

Apakah Itu APR? Panduan Mudah Kadar Peratusan Tahunan

Ketahui maksud APR, bagaimana ia merangkumi faedah dan yuran wajib, serta kepentingannya dalam menilai kos sebenar pinjaman.

Simple (Flat) Interest Explained: Formula and Calculation

Learn how flat simple interest is calculated on the original principal and why a 5% flat rate is equivalent to nearly a 9% to 10% effective APR.

Reducing Balance Interest Explained: Why It Is Fairer for Borrowers

Understand how reducing balance interest charges interest strictly on remaining debt, ensuring you only pay for money you currently hold.

⚠️ Bahan Pendidikan Kewangan Sahaja

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Alat pendidikan sahaja. FinWise Labs bukan pemberi pinjaman, broker, bank, atau penasihat kewangan.