If you are not a finance people or don’t know much about finance but want to know how the banks calculate your savings or loans amounts, you should understand compound interest first.
Compound interest is an interest that arises when interest is added to the principal everytime the interest is due, so the total amount will be calculated together to earn next interest. The addition of interest to the principal to get another interest is called compounding. You will see that some banks put advertisement about daily interest rate, weekly interest rate which mean your savings amount will grow based on that interest period. For example, a saving with $100 initial principal and 1% interest per month would have a balance of $101 at the end of the first month, $102.01 at the end of the second month, and so on.
This compound interest also applicable for loan. So, make sure that you read carefully your loan terms especially about how your lender apply the interest terms. This compound interest calculator is a simple calculator that will calculate the future value of your savings or loan amount based on daily, weekly, quarterly, semi-annually and annually compounded period. And you can also see how the total interest applied to your savings or loans based on that compounded period.
You can download the file here.