Note: there are other ways of calculating interest and repayments. If the way you want to do it isn’t listed get in contact.
Principle = The amount you want to borrow
Interest = The percentage divided by 100. for example: 2% = 2/100
Term = the number of periods to which the Interest Rate applies. For example: 5 years or 28 days
This is the simplest one of all. The formula is:
Total to Pay = Principle x (1 + Interest)
For example: a loan of $100 with an interest rate of 5% returns:
$100 x (1 + 0.05) = $100 x 1.05 = $105
It doesn’t matter how long the loan is taken out for, the interest is always the same.
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