Interest Expense is calculated using the formula given below Calculate the total amount of Interest the Company has to pay at the end of March 31 st 2019 if the rate of interest stands 5.25% / annum. On 1 st October the Company has increased its total Borrowings to INR 92,923 Cr. Tata Motors Ltd had total Borrowings (including Long-term and Short-term borrowings) of INR 88,950 Cr on 31 st March 2018. Total amount paid for Interest = INR (18.36+ 10.5) = INR 28.86 Cr. Interest Expense (Short Term) = INR 10.5 Cr.Interest Expense (Short Term) = INR 105 Cr * 10% * 1.Interest Expense for short term loan is calculated using the formula given below Interest Expense (Long Term) = INR 18.36 Cr.Interest Expense (Long Term) = INR 216 Cr * 8.5% * 1.Interest Expense = Principal Amount (Total Borrowed Amount) * Rate of Interest * Time Period Interest Expense for long term loan is calculated using the formula given below
Calculate the Interest expense on 31 st March. has long term Loan of INR 216 Cr on 31 st March with a simple interest rate of 8.5% per annum and a Short-term loan of INR 105 Cr during that time period with a rate of interest of 10% per annum. Thus, the amount paid by ABC ltd at the end of the year = INR (8,500 + 1,00,000) = INR 1,08,500 Interest Expense Formula – Example #2 Total amount paid for Interest is INR 8,500