MANAGEMENT

Detailed explanation-1: -Example 1: A $10, 000 loan with a 5-year term at 13% Annual Percentage Rate (APR) would be repayable in 60 monthly installments of $228 each.

Detailed explanation-2: -The principal amount borrowed is divided by the interest rate plus total fees; this figure is then divided by the total number of days in the loan term. The resulting number is multiplied by 365 (representing one year) and then multiplied again by 100 (to yield a percentage).

Detailed explanation-3: -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-4: -A simpler way to look at it is monthly payment = principal x (interest rate / 12). The formula might seem complex, but it doesn’t have to be. Using example figures for the formula may make it easier to understand, so let’s start from there.