a loan on which interest is calculated is called
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Answer:
When you borrow money, you have to pay back the amount of the loan (called the principal), plus pay interest on the loan. ... Compound interest is calculated on the principal amount plus the accumulated interest of the previous periods, which means you effectively pay interest on the interest.
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Step-by-step explanation:
Divide your interest rate by the number of payments you'll make in the year (interest rates are expressed annually). So, for example, if you're making monthly payments, divide by 12. 2. Multiply it by the balance of your loan, which for the first payment, will be your whole principal amount.
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