Simple interest is calculated on the _________ for the entire loan period.
previous amount
same amount
same interest
different rate
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Answer:
Simple interest is calculated on the same amount for the entire loan period.
More:
Sometimes, in need, we borrow money from a bank or some other agency during financial business. In general, the money is borrowed for specified period and has to be returned in the end of that period. At the end of the period we pay the money borrowed plus some extra money for utilising the money of the lender.
The money borrowed is called the principal, the extra money paid for using lender's money is called interest and the total money, paid to the lender at the end of the specified period is called the amount.
Amount = Principal + Interest
A = P + I
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