How To Use Python For Financial Calculations & Debt Management

The leading programming language, Python, has become a go-to tool for financial calculations and debt management. Widely used in quantitative finance to analyze large datasets, Python also allows users to manage their own money.

With simple and easy-to-learn functions, anyone with basic math knowledge can use a variety of financial calculations in Python. Keep reading this article to learn how to implement some of these financial calculations, such as simple interest, compound interest, and monthly EMI.

This guide also covers everything you need to know about debt management with Python and how it can support the use of debt calculators.

Basic Financial Calculations Using Python

Python showcases a number of libraries that support different mathematical calculations. Therefore, it’s simple nature and accessibility make it the ideal choice for anyone looking to manage their finances. 

Let’s take a look at some of the basic financial calculations you can do in Python, in which you can use within a debt management setting. 

How Do I Calculate Simple Interest Using Python?

Firstly, Simple interest is a calculation used to work out the accumulated interest of loans or savings. Simple interest is received or paid in a fixed percentage over a set period of time. 

For example, take a student who acquires a simple interest loan to pay for a college that costs $20,000 with an annual interest rate of 9%. Over the next three years, the simple interest would amount to $1,800. Therefore, the total amount owed would be $21,800.

To calculate simple interest using Python you will need the principal amount, rate of interest, and period of time. Then put these into the function “simple_interest”. With the example above, it would look like: “simple_interest(20,000, 9, 3)”.

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These data types with brackets in Python are referred to as Tuples.

How Do I Calculate Compound Interest Using Python?

Secondly, compound interest calculates the interest on a deposit or loan based on the initial principal and the previously accumulated interest. In other words, it refers to “interest on interest”. Calculating compound interest is useful for all types of debt management

For example, let’s say the student from earlier has taken an interest rate of 9% per year compound annually. While in the first year the total amount would increase by $1,800, the second year would be calculated as $1,890. Then, in the third year, the interest would be calculated at $2,060. After three years, the student would owe $24,950.

The compound interest calculation on Python is very simple. This time, use the function “compund_interest(1000, 10, 2)”.

How Do I Calculate Monthly EMI Using Python?

Equated Monthly Installment (EMI) is a fixed payment from the borrower to the lender made on a specific date each month.

For example, if our student borrows $20,000 with a 9% annual interest rate for 3 years (36 months), the total amount of interest during the loan term will be $22,896. This means that the EMI will be $636.

To work out EMI using Python you will need the principal borrowed, rate of interest, and tenure of the loan. Then the function will look like “EMI(20000, 9, 36)”.

Python Loan Calculations For Debt Management

Python also offers great support for those calculating how much they can borrow and what the repayment would be. The Numpy financial library for Python can answer both of these questions for you.

Once you have installed this library, you can begin to calculate how much you can afford to borrow using monthly payment, interest rate, and length of the loan. All the calculations are easy to learn with dedicated support from Python.

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By using the Numby financial library, you can calculate:

  • How much my payment will be.
  • How much of my payment goes to interest and how much goes to principal.
  • What the total interest paid is over the duration of the loan.
  • How much I am able to borrow.

Therefore, the more you know about your loan, the easier debt management will be. This will certainly provide support for your future debt management plan, or when considering a repayment strategy.

Finally, pair the Numby financial library for Python with The Get Out of Debt Calculator to solve all your debt-related questions!


Python is a great way to calculate financial figures and stay on top of your debt management. Whether you want to quickly calculate simple interest, compound interest, or monthly EMI, Python is the software to use. 

Furthermore, don’t fall behind in your debt management plans with the Numpy financial library for Python. Using this, you are able to know exactly how much you can borrow and what the repayment will be. 

So, why not use Python today and never worry about any tricky financial calculations again! 

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