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Current (principle balance) x (interest rate per year) x (amount of time).

Examples:

~for calculating monthly interest, it would be (principle balance) x (interest rate) / 12.

~for daily interest, it would be (principle balance) x (interest rate) / 365.

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15y ago
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14y ago

interest=principal times rate times time

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Q: Which formula determines the interest amount on a loan?
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What formula determines the interest amount on a loan?

To find the APR which is the true rate of interest charged for a loan, use the following formulawhere APR is the annual percentage rate,i is interest (finance) charge on the loan,P is principal or amount borrowed, andn is number of months of the loan. APR = 72i__________________3P(n + 1) + i(n - 1)


What does a student loan consolidation interest rate determine?

A student loan consolidation interest rate determines the amount of your monthly payment on your student loan. Higher interest rates would result in higher monthly payments.


How do you use a home loan calculator?

You enter in data which generally includes: loan amount, loan term, interest rate, and down payment. The calculator determines approximately what your monthly mortgage payment would be based on the data.


How do you calculate nominal interest rate?

Nominal interest, is the amount of interest on a loan or investment that does not take into account inflation; it's the amount of interest listed on the loan or bond.


What is the principal on a loan?

It is the base amount of the loan, but not including interest.


What is explicit interest?

Explicit interest is the amount of money that is paid on a loan. This means that it is a fixed amount of interest.


How does one use a mortgage calculator?

A mortgage calculator works by taking in the general loan information amount, interest rate, term. The calculator takes the information and determines a monthly payment amount.


The amount of a loan is called the what?

The main loan amount is called the principle. The amount charged monthly for the loan is called interest.


How do loan processing companies make money?

Loan processing companies make money from interest. Interest is a specific percentage of the original amount taken from the loan processing company. When taking out a loan, the loan user takes a specific amount and is expected to later pay the same amount plus the interest they owe.


What are principal and interest on a loan?

Principal is the amount you borrowed and interest is the money you give them as a 'gift' for letting you loan their money.


What is the meaning of principle on a loan?

The base amount of the loan - not including interest That is the principal of the loan not the principle


Say you bought your truck for 12000 almost 3 years ago you have been paying over 300 a month for it since then how do you still owe 13692 on it?

The difference in the money amount is the interest you are paying on the loan. The formula is Interest=principal (amount of the loan)xrate of interest x time(lenght of time you pay the loan off. I= PxRxT Interest equals the principal x rate of interest x Tim (payoff time). Hope this helps.