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The answer will depend on
- who you borrowed it from (a loan shark could well charge more than several hundred times what a reputable lender would charge),
- how long the loan was for,
- what the loan was for,
- what the expected return on your loan was,
- your credit rating or how risky the lender considered you,
- what securities you could put up - in case you did default on the loan,
- what the inflation rate was - now and over the term of the loan,
- the "normal" loan size for the lender.
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How much would you repay the bank if you borrowed 7900 at 4.3 percent annual interest for 6 years?
9,938.20 * * * * * That would be correct only if banks charged simple interest as opposed to compound interest. Anyone believe that likely? The correct answer, when interest is compounded, is 7900*(1.043)6 = 10170.28
When you borrowed $50 from your rich cousin, and then had to pay her back $60, what is the original $50 called?
The original $50 loan would be considered the principal amount. The extra $10 would be considered interest charged on the principal.
How much is 5 years auto loan at 0.9 percent interest?
That would depend on the original principal (the amount you borrowed) and how they compute interest.
If an account balance is being charged 1 percent interest per week is this the same thing as saying 52 percent per year. What is the equation for finding the true annual rate of interest?
No if the account earns interest daily, it's earning interest on interest essentially. So if you have $100 and you earn 1% interest, you would have $101 dollars the next day and earn 1.01 dollars in interest, and so on.
How can compound interest be derived from simple interest?
Compound interest is simply simple interest except the amount of interest you owe is always added into the amount of money you borrowed before you calculate.Lets give an example.You borrowed a million from the bank at Year 2000 with interest rates of 5%.The formula for simple interest is PIN/100, where P is Principle (amount owed), I is interest rate (in percentage), N is the number of years.Year 2000: 1,000,000Year 2001: 1,000,000 * 5 * 1 / 100 = 50,000 (this is the interest)Year 2002: (1,000,000 + 50,000) * 5 * 1 / 100 = 52,500By the end of 2002, you would owe the bank 1,102,500(1,000,000 + 50,000 + 52,500)The formula for compound interest is P * (1 + I/100)N where P,I and N still refers to the same thing.Year 2000: 1,000,000Year 2001: 1,000,000 * (1+5/100)1 = 1,050,000Year 2002: 1,050,000 * (1+5/100)1 = 1,000,000 * (1+5/100)2 = 1,102,500
