ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Divide your interest rate by the number of payments you’ll make that year. If you have a 6 percent interest rate and you make monthly payments, you would divide 0.06 by 12 to get 0.005. Multiply that number by your remaining loan balance to find out how much you’ll pay in interest that month.

Detailed explanation-2: -Hence CI will be 15507 rupees. Was this answer helpful?

Detailed explanation-3: -How do you calculate principal and interest? To find the interest portion for the month, multiply the outstanding principal (your current loan amount) by the annual interest rate, and divide that number by 12.

Detailed explanation-4: -Simple interest is calculated on the principal, or original, amount of a loan. Compound interest is calculated on the principal amount and the accumulated interest of previous periods, and thus can be regarded as “interest on interest.”