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Your question is uncompleted because to calculate the interest, you must know the annual interest rate, then repayment period than what are the term like you have to pay interest on the total balance till the end or you have to pay it on the remaining balance.
Once you have this information than you would be able to calculate the interest properly.
For simple calculation just multiply the annual interest rate with the loan amount and you will have the annual amount of interest. Later you can further calculate it for less or more period by simple calculation.
Above all Calculation is correct but above calculation is used for consumer loan not for company running finance , cash finance because if you borrow loan from bank for enhancement of your business this loan intrest calculat last drawn amount like if you have approved limite SAR1 million and you draw only300 Thousand so bank is calculate like this.
300,000 X rate of intrest /365*no of days utilized.
Concerning your question you should always remember the following
financial equation:
Interest = Principle x Interest Rate x Time
Example:
Principle (loan) = $250,000
Interest Rate =6% Anually (Per Year)
Time =5 years
This means that:
Interest = $250,000 x0.06 x5
= $75,000
This means that $75,000 is going to be paid as interest on the loan amount $250,000 over5 years
This means $75,000 divided over5 = $15,000 per year as $1,250 per month
Simplification:
$250,000 + $75,000 = $325,000
$325,000 divided over5 = $65,000 per year ($50,000 + interest $15,000)
$65,000 divided over12 months = $5,417 per month ($4,167 + interest $1,250)
I hope my answer finds you well.
Rate of Intrest depends on amount and tenure of loan. The more the amount and repayment tenure the more is the intrest and vise versa....
the total amount of interest that will be paid =multiply the loan amount by the annual interest rate and by the loan period.suppose that loan amount is $100000, int rate20% and the period is8 months ,the amount of interset will be:100000*20%*8/12=$13333.33
Payment of Interest or payment of Installment of a Loan depend on income. if some one earn $3000 per month, his repayment may be fixed30% of Income, such as will pay for installment of $900 per month.
Depanding on Intetest rate and loan amont, EMI may be set by loan tenure.
simply draw loan amortization shedule.
The total cost of a loan is the actual money you borrow plus all of the interest you will pay.
Interest = Principle x Interest Rate x Time
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