Chit Fund Calculator
Chit
Auction
Bidder
14.12%
₹0
Other Members
₹0
₹0
₹0
₹0
₹0
0%
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What is a Chit Fund and how It works ?
Read this guide to understand more about chit fund using an example.
Formulas used in this chit fund calculator
Below two formulas are used for the calculations related to Auction.
- Bidding Rate (annualized) = (max(Bid Amount, Commission) * 12 * 100) / ((Chit Amount – Bid Amount)*(Total Months – Current Month))
- Bid Amount = (rate * Chit Amount *(Total Months – Current Month)) / (12 * 100 + rate *(Total Months – Current Month))
For calculating the payable monthly installment and the monthly returns percent, following formulas are used.
- Original installment = Chit Amount / Total Months
- Commission = Commission % * Chit Amount
- Total Discount = Bid Amount – Commission
- Discount per person = Total Discount / Total Months.
- Payable Installment = Original Installment – Discount per person
- Monthly Savings or Returns = (Discount per person / Original Installment ) * 100%
FAQ
#1. What is Chit Fund Calculator ?
Chit Fund Calculator is a tool used to find the Rate of borrowing through auction from a chit fund. It is also used to calculate the following
- Reverse calculation of Bid Amount, for a given rate of loan.
- Commission amount from commission percent.
- Total discount the non bidding members will get in their monthly installment.
- Monthly installment payable after deducting the discount.
- Monthly returns from the Chit fund.
#2. Can we calculate the total returns of Chit fund ?
This calculator can only give the monthly returns or saving in the installment. Because the monthly savings is dependent on the Bid amount.
Bid amount will vary each month, based on how low the members are willing to bid. Without knowing the future months Bid amount we can’t calculate the Total Returns for the whole period of Chit Fund.
So the total returns of the chit fund cannot be predicted in advance by anyone.
#3. Who will benefit from this calculator ?
This will benefit those who participate in the chit fund bidding or auction. Because they will be willing to bid till a particular borrowing rate. This tool will give you the amount to bid.
The reverse is also possible.
For example, if I am planning to call a bid amount of 30,000 I can quickly calculate what is the rate of that bidding.
This calculator can also help the person managing the chit fund. They can calculate the installment payable by giving the final bid amount.
Also, they can share that final installment amount with all the members by using the share result option. You can share will all the sharing app in mobile or PC.
#4. How are Chits calculated ?
Each month Auction will be conduction in a Chit Fund for the Chit amount. The lowest bidder will get the Chit.
The bidder will get the chit amount after deducting the bid amount he called. If the bid amount is less than commission, which won’t happen normally, the bidder still needs to pay a minimum amount, equal to the commission.
This bid amount will be distributed among the non bidding members after deducting the discount.
So other members only needs to pay the installment after deducting that discount. This is the returns from the Chit fund.
#5. What is the interest of Chit Fund ?
There are two type of interests in a chit fund.
First, is the interest at which the bidder calls the bid. This is similar to a loan interest. This is the Bidding Rate in this calculator.
Second, is for the non bidding members. This refers to the percentage of installment saved that month. It is equal to the “Monthly Savings” in this calculator. This should be added up each month to get the total returns from the Chit Fund.