How to use this calculator
Enter the principal (साँवा), the rate (in saikada or % per year), and the time in years, months and days. Choose साधारण for simple interest or चक्रवृद्धि for compound, and pick how often it compounds. You will see the total interest and the total amount (principal + interest).
Village and informal lending in Nepal
Alongside banks, a great deal of borrowing in rural Nepal happens informally between neighbours, relatives and local lenders. Here interest is quoted as saikada— rupees per Rs 100 per month, so “2 rupaiya saikada” means 2% a month, or 24% a year — and it is often compounded yearly (chakrabriddhi). These rates can be far higher than bank rates, and unclear compounding has fed disputes and the well-known “meter byaj” problem. Calculating the exact interest and total payable for both साधारण (simple) and चक्रवृद्धि (compound) helps borrowers and lenders agree on a fair, transparent figure and avoid later disagreements.
Frequently asked questions
What does 'saikada' (सयकडा) mean?
In village lending in Nepal, the interest rate is usually quoted as rupees per Rs 100 per month. For example, '2 saikada' means Rs 2 interest on every Rs 100 each month — that is 2% per month, or 24% per year. This calculator lets you enter the rate that way, or as a percent per year.
What is the difference between साधारण (simple) and चक्रवृद्धि (compound) interest?
Simple interest is charged only on the original principal for the whole period. Compound interest adds the earned interest back to the principal at the end of each period (for example, every year), so the next period's interest is calculated on a larger amount — interest on interest.
How is compound interest calculated here?
For each full compounding period (yearly by default, or 6-monthly, quarterly, monthly) the interest is added to the principal. Any leftover months or days after the last full period are charged as simple interest on the latest amount — the method commonly used in village lending.
How is the time counted?
You can enter years, months and days. Days are counted as 30 days to a month and 12 months to a year, which matches how informal interest is usually calculated.