Last Updated on April 9, 2022 by Galaxy World
Calculation of interest on Motorcar and Motorcycle Advance is really a great topic for the employees who don’t know the ABC of accounts. Most of the employees depend on auditors and accountants or other clerical staff to calculate the interest on the advances they have drawn. Sometimes they due to unawareness of the calculation of the amount of interest many employees may pay more interest than the actual interest amount, this is really a financial loss for the employee.
For the conveyance of such employees, I would like to mention here a simple formula for such calculation. They can just calculate their own amount of interest or advance of interest rather than depending on others.
Formula of Calculation of Interest
=Amount of Advance x Number of Installments +1 x Rate of Interest/2400
The individual must remember the following things to calculate the amount of interest:
Amount of Advance for Motorcycle and Motorcar Advance
The amount of advance for Motorcar is Rs. 10,00,000/- and the amount of Motorcycle advance is Rs. 100,000/-
You would like to see: Rates and Conditions of Motorcycle, Cycle and Car Advance
Number of Installments for Motorcycle and Motorcar Advance
The number of installments for both the cases i.e Motorcycle and Motorcar Advance is 60.
Rate of Interest:
The rate of interest for both cases is the same as the GP Fund Interest Rate. For example, if you have drawn the amount of advance in 2012-13 then you will use the interest rate of GP Fund of 2012-13.
Example of Calculation of Motorcycle and Motorcar Advance
Suppose a person draws 75,000/- as motorcycle advance in January 2010, then the amount of interest will be as under:
75000 x 60 x 14.00/2400 = 26250/-
Thus in this way, the employee will have to pay an interest of 26,250/ – and the total amount along with interest will be Rs. 101,250/-
Don’t Miss: GP Fund Interest Rates 1963 to 2012-13