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Compound Outstanding Interest Calculation

A businessman took out a loan of Rs. 100,000 from PNB bank. The loan was to be paid back in 4 equal installments. Interest rates for the installments were 10%, 12%, 15%, and 18% respectively for periods of 30 days each. The document provides instructions on how to set up accounts and record transactions in Tally to track the compound outstanding interest calculation for this loan.

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Michael Wells
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79 views11 pages

Compound Outstanding Interest Calculation

A businessman took out a loan of Rs. 100,000 from PNB bank. The loan was to be paid back in 4 equal installments. Interest rates for the installments were 10%, 12%, 15%, and 18% respectively for periods of 30 days each. The document provides instructions on how to set up accounts and record transactions in Tally to track the compound outstanding interest calculation for this loan.

Uploaded by

Michael Wells
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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COMPOUND OUTSTANDING INTEREST

CALCULATION
If a businessman takes loan from any bank, then interest is
charged on outstanding balance.
If the businessman refunds the balance by instalment, then the
bank charges different rate of interest on all instalments. It is
called Compound Outstanding Interest Calculation.

Example:-

A businessman takes loan of Rs. 1,00,000 from PNB. He decided


to refund the loan in four equal instalments. The bank charges
different rates of interest that is 10%, 12%, 15% and 18% per 30
days.
Calculate the interest and record the above transactions.

To maintain:-

First of all create a company and then activate interest calculation


and debit/credit note as follow:-

To Activate Interest Calculation and Debit/Credit Note: -


G.O.T. (Gateway of Tally)--> Press F11 (Company Features)--
> Press F2 (Inventory Features).
Now create ledger as follow:-

Path for ledger creation: - G.O.T. (Gateway of Tally)--


> Accounts Info--> Ledger--> Create (Single).
After that do voucher entry:-

Path for voucher creation: - G.O.T. (Gateway of Tally)--


> Accounting Voucher--> Press F6 (Receipt Voucher).
Now press F5 for Payment Voucher.

And then press F2 to change the voucher dates follow:-


Now view the interest ledger of PNB as follow:-

Path for view interest calculation: - G.O.T. (Gateway of


Tally)--> Display--> Statement of Account--> Interest
Calculation--> Ledger--> PNB.

Create voucher type as follow:-

Path for voucher type creation: - G.O.T. (Gateway of Tally)--


> Accounts Info--> Voucher Type--> Alter.
When you will press “enter” key on “Alter”, a list of voucher types
will be open. You will select there “Credit Note” as follow:-
Press “enter” key on “Credit Note” and a form will open, fill as
follow:-
After that press “enter” key and then as follow:-

Press “enter” key.


Accept the voucher by pressing “enter” key or “y”.

Now again do voucher entry as follow:-

Path for voucher creation: - G.O.T. (Gateway of Tally)--


> Accounting Voucher--> Press Ctrl + F8 (Credit Note).

Press “enter” on “Interest Payable” and the voucher will be open


as follow:-
Do voucher entry for payment of interest as follow:-

Path for voucher creation: - G.O.T. (Gateway of Tally)--


> Accounting Voucher--> Press F5 (Payment Voucher).

You can see the interest calculation of PNB ledger as follow:-

Path for view interest calculation: - G.O.T. (Gateway of


Tally)--> Display--> Statement of Account--> Interest
Calculation--> Ledger--> PNB.
You can see that the above PNB ledger is blank, it means that all
the interest have been paid.

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