Ask someone borrowing from a five-six (Bumbay) money lender. How much will be charged if you want to loan 5,000 payable in one year? Determine the interest rate per period and the annual interest rate.It is good loan term? why or why not?
Answers
Answered by
3
Answer:
Step-by-step explanation:
Interest is the price you have pay to money lender of borrow money . If you borrow a Rs. 5000 personal loan, you may wind up paying the lender a total of almost Rs.5,000 over the next 1 years. That extra Rs1,000 is interest.
If a lender uses the simple interest method, it’s easy to calculate the interest on your loan.
If you take out a one-year loan for Rs.5000 and the interest rate on the loan is 10 percent, the simple interest formula works as follows:
5,000 x 10 x 1 / 100 = 500 as in interest.
But in real life money lender calculate as compound interest. If you are paying annually, and it's for one year than it will be same. if you are paying for more than one year it will changed totally.
Similar questions