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Sometimes we need to calculate gold loan interest in Excel. In this article, we will show you how to calculate gold loan interest in Excel with 2 easy approaches. We have also included some relevant concerns at the end of this article. So, let’s get started.
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What Is Gold Loan Interest?
With a gold loan, borrowers must pledge their gold jewelry as security in order to obtain funding from a lender. Due to the lack of a set value benchmark, gold loans are only granted against the cost of the “gold” in the jewelry after subtracting the weight of any stones or embellishments. The borrowers make interest payments on the external financing and repay the principal plus interest at the conclusion of the loan term. The credit account is closed once the whole price and interest have been paid, and they receive their gold jewelry back.
Learn to Calculate Gold Loan Interest in Excel with These 2 Approaches
Consumers or applicants can use the Gold Loan Interest Calculator to determine the monthly payment with the interest rate for the gold loan they intend to take out against their own gold or gold jewelry. Their own gold or gold ornaments must be maintained with the lender as a guarantee or collateral till a loan is paid off in whole and on time. The Gold Loan Interest Calculator can assist a borrower in determining the approximate number of payments required to repay the loan. Applicants can test out different interest rates and payback terms given by top financial institutions by downloading the Gold Loan Interest Calculator.
While writing this article, “2 Ways to Calculate Gold Loan Interest in Excel”, we’ve considered a dataset that contains approximately 5 columns and 12 rows. In this dataset, we added Gold Unit, Present Rate, Annual Interest Rate, Number of Years, Monthly Loan Payment, Total Paying Amount, and Annual Interest on Loan to make you better understand. But if you want, you can change the entities and put your own values.
1. Apply PMT Function to Calculate Gold Loan Interest
If you want to calculate gold loan interest in Excel then applying the PMT function will be very helpful to you. It is not a very difficult task. We have tried to give a short description to make you better understand.
PMT(rate, nper, pv, [fv], [type])
🔨 Formula Breakdown
Here,
👉 rate is indeed the loan’s yearly interest rate.
👉 The credit period is nper (number of years for which the credit is granted).
👉 pv stands for primary value, also known as the initial loan sum.
👉 Future value (fv) is an optional term.
👉 type determines when the payment is due; this is optional.
You can follow the given steps to achieve the process.
⬇️⬇️ STEPS ⬇️⬇️
- Initially, select cell E10.
- Secondly, write the following function on that cell.
=-PMT(D6/24,E6*12,C6)
🔨 Formula Breakdown
Here,
👉 We have considered the Number of Years as 2 (24 months). That’s why we applied the formula of D6/24.
- Thirdly, tap Enter.
- Belatedly, select cell E11.
- Afterward, write the following function on that cell.
=E10*24
- Then press Enter.
- Fifthly, you select cell E12.
- Afterward, write the following function on that cell.
=E11-C6
- Press Enter.
- Finally, you will see the desired result.
Undoubtedly, this is a very easy and handy technique to work on.
📕 Read More: 4 Approaches to Calculate Home Loan Interest in Excel
2. Using Generic Formula
Using the generic formula is one of the best and easiest ways to calculate gold loan interest in Excel. You can achieve this approach easily if you want. You just need to follow the below procedures.
⬇️⬇️ STEPS ⬇️⬇️
- Primarily, you need to select cell E10.
- Secondly, you need to write the following function on that cell.
=(((C6*D6/24)*(1+D6/24)^E6))/(((1+(D6/24))^E6)-1)
- Then tap Enter.
- Belatedly, you have to select cell E11.
- Fourthly, write the following function on that cell.
=E10*24
- Now press Enter.
- Fifthly, you need to select cell E12.
- Afterward, just write the following function on that cell.
=E11-C6
- Again tap Enter.
- Consequently, you will get the result you wanted to see.
Truly, you can easily do this approach.
📕 Read More: 6 Steps to Create Car Loan Calculator in Excel Sheet
How to Create Daily Loan Interest Calculator in Excel
Based on the interest rate and total annual loan amount, the daily loan is the sum that you need to pay. Excel allows you to design a single daily loan interest calculation. The interest rate and the annual loan balance are the only two things left to enter after that. Based on the provided data, the calculator will immediately compute the daily loan interest amount. You will discover how to quickly and easily make a daily loan interest calculator in Excel in this portion.
⬇️⬇️ STEPS ⬇️⬇️
- Firstly, select cell E6.
- Secondly, put the following formula there.
=(C6*D6)/365
- Now you need to tap Enter.
- Using the fill handle icon, drag the formula to the entire column.
- Eventually, you will see what you wanted to see.
Indeed, it is a very good approach to calculating daily loan interest in Excel.
📕 Read More: 2 Approaches to Calculate Interest Between Two Dates in Excel
How to Calculate Interest Rate from EMI in Excel
You’ve come to the correct place if you’re trying to figure out how to compute interest from an EMI in Excel. We’ll attempt to cover how to compute interest rates from EMI in this portion. EMI is typically compared to a monthly payment. This is the monthly payment a borrower makes to the lender. This EMI affects the interest rate. The interest rate depends on a few other factors as well. However, we’ll go over how to calculate interest rates from EMI in this section using the RATE function.
=RATE( periods, -payment, amount)*12
Now maintain the following steps.
⬇️⬇️ STEPS ⬇️⬇️
- Initially, select cell F6.
- Secondly, put the following formula there.
=RATE(D6,-E6,C6)*12
- Now you need to tap Enter.
- Use the fill handle icon to drag the formula to the entire column.
- Finally, you will see what you wanted to see.
Undoubtedly, this is a very easy and handy technique to work on.
📕 Read More: 5 Examples to Calculate Monthly Interest Rate in Excel
📄 Important Notes
You should be aware of the following things while performing the processes mentioned above:
🖊️ You need to be very careful while using the Excel functions.
🖊️ You should be conscious when you intend to define the number of years or installments.
📝 Takeaways from This Article
If we summarize the whole article, we have got some points.
📌 Initially, we gave the definition of gold loan interest.
📌 Secondly, we applied the PMT function to calculate gold loan interest in Excel.
📌 Thirdly, we adopted the generic formula to calculate gold loan interest in Excel.
📌 Belatedly, we defined a gold loan interest calculator.
📌 Afterward, we designed a daily loan interest calculator in Excel.
📌 Finally, we tried to show you how to calculate interest rates from EMI in Excel.
Conclusion
We wish that you would be able to calculate gold loan interest in Excel using this article. As several methods have been shown here, you can easily follow which one is best suited for you. If you have any skepticism, feel free to ask me in the comment. In the end, to learn more about Excel tactics, we recommend you to visit our website www.ExcelDen.com.
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