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Sagot :
Answer:
- Gather information like your principal loan amount, interest rate and total number of months or years that you’ll be paying the loan.
- Calculate your total interest by using this formula: Principal Loan Amount x Interest Rate x Time (aka Number of Years in Term) = Interest.
If you take out a five-year loan for $20,000 and the interest rate on the loan is 5 percent, the simple interest formula works as follows:
$20,000 x .05 x 5 = $5,000 in interest
You might encounter simple interest on short-term loans. However, the way most banks and lenders charge interest is more complicated.
Step-by-step explanation:
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