Every SumSense calculator uses a published formula. This page lists the method, key assumptions and sources for each one. Each calculator also shows its working under “What your result means”.
Loans
- EMI: EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1), where P is the loan amount, r the monthly rate (annual rate ÷ 12) and n the number of months. This is the reducing-balance method used by Indian banks.
- Eligibility: the largest EMI you can afford is your net monthly income × FOIR (fixed obligation to income ratio) minus existing EMIs. The loan amount is the present value of that EMI over the tenure. Lenders use FOIR of roughly 40–60% depending on income.
- Prepayment: we rebuild the schedule month by month, apply part-payments on the chosen month, and either shorten the tenure or reduce the EMI.
Investments
- SIP: monthly compounding with each instalment invested at the start of the month; step-up raises the SIP once a year.
- Lumpsum: FV = P × (1 + r)t with annual compounding.
- PPF: annual deposit, interest compounded yearly at the current government-notified rate.
- FD: quarterly compounding by default (common bank practice), with payout options.
- RD: monthly deposits with quarterly compounding, as used by most banks.
Tax and salary
- Income tax: slabs, standard deduction, rebate and surcharge for the selected financial year, plus 4% Health and Education Cess. Both regimes are computed side by side.
- HRA: exemption is the least of (a) actual HRA received, (b) rent paid minus 10% of salary, and (c) 50% of salary in metro cities or 40% elsewhere.
- Gratuity: 15 days’ last-drawn salary for each completed year of service, using a 26-day month for employees covered by the law.
- Capital gains: holding period decides short or long term; rates and exemptions follow the current Finance Act.
Business
- GST: GST = value × rate. Intra-state supplies are split equally into CGST and SGST; inter-state supplies attract IGST.
Rates and rules we rely on
Current rates (PPF, small savings, RBI Bank Rate, EPF limits and tax slabs) are kept in one place and dated. See the Rates & Rules Update Log.
Limits of any calculator
Banks may round differently, charge processing fees, or use daily-reducing balances. Returns on market-linked investments are not guaranteed. Treat results as close estimates and confirm with your lender, fund house or adviser.