Question

How do you calculate Simple Interest on a Loan?

Answer 1

Explanation of Simple Interest on a Loan:

The Simple interest is interest calculated on the principal portion of a loan .

So, to calculate simple interest on loan we use formula of simple interest

$$\begin{gathered} i.e,Formulaof\mathrm{si}mpleinterest\mathbf{(}\mathit{S}\mathbf{.}\mathit{I}\mathbf{)}\mathbf{}\mathbf{=}\frac{\mathbf{P}\mathbf{\times }\mathbf{R}\mathbf{\times }\mathbf{T}}{\mathbf{100}} \\ Where, \\ P=Amountofloantaken\left(principal\right) \\ R=RateofInterestin\%perannum \\ T=Timeinyears \end{gathered}$$

Hence, the simple interest of loan can be calculated by using the above formula. .