$60.00 would be the interest cost simple interest for a $2000 loan with a 6% rate for a half of a year.
In a year the interest cost would be $120.00 on the $2,000.00 loan at 6 percent.
The formula that is used to determine simple interest on a loan is an easy one.
Just simply multiply your loan's principal amount by the annual interest rate by the term of the loan in years.
This type of interest usually applies to automobile loans or short-term loans, although some mortgages use this calculation method.
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.
Interest is the price you pay to borrow money or the return earned on an investment.
For borrowers, interest is most often reflected as an annual percentage of the amount of a loan.
This percentage is known as the interest rate on the loan.
The interest rate is the amount a lender charges a borrower and is a percentage of the principalâ€”the amount loaned.
The interest rate on a loan is typically noted on an annual basis and expressed as an annual percentage rate (APR).