The basic formula of interest calculation is: interest = principal × interest rate × time (year).

After-tax interest = principal × profit tax × time ×( 100%- interest tax rate)

Interest tax = principal x interest rate x time x interest tax

Sum of principal and interest = after-tax interest+principal.

Principal is the original amount of a loan, deposit or investment before interest is calculated. As a whole, the principal of an enterprise (including fixed capital and working capital) is simultaneously and spatially juxtaposed at different stages, and is manifested in different forms of principal occupation.

Extended data

Principal requires financial institutions not only to implement the policy of "developing economy and ensuring supply" to ensure the capital needs of enterprises' production, operation and foreign investment activities, but also to practise economy, rationally allocate principal and give full play to the regulatory role of finance in production, operation and foreign investment activities. So as to make full use of monetary resources and comprehensively improve the economic benefits of enterprises.

The principal repayment method is as follows:

1. Equal repayment of principal and interest

According to the mortgage loan, the total principal and the total interest are added up and then distributed evenly to each month of the repayment period. As a repayment, he pays a fixed amount to the bank every month, but the proportion of principal in the monthly repayment increases month by month, and the proportion of interest decreases month by month.

2. Equal principal repayment

Divide the principal into months and pay off the interest between the last repayment date and the current repayment date.

Baidu Encyclopedia-Principal