explain the interest in bank loan and it's repayment (5mark)
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A loan is the money you receive from a bank or financial institution in exchange for a commitment to repay the principal amount with interest. Since lenders take the risk of a possible default, they charge a fee to offset this risk – and this fee is known as the interest.
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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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