Sir how do we calculate interest on a 3 year loan?
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Interest on loan
5y ago#1It depends on what is asked. Does the question want the amount of interest each year, or does it want the total interest over three years, or does it want the equivalent annual interest rate?
I suggest that you watch my free lectures working through Chapter 24 of our free lecture notes.
Total interest over the 3 years
5y ago#3If the interest is R per year, then the total amount owing after three years is the amount of the loan multiplied by (1+R)^3.
If you subtract the amount of the loan from this figure then the difference is the total interest charged.
Again, have you watched my free lectures?
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