Imagine you borrow 1000 dollars from a friend. They agree to charge you 5% interest per year, and you’ll pay them back over 10 months.

Here’s a simple way to figure out how much you’ll pay each month:

1. Calculate the total interest:
   • 5% of 1000 dollars is 50 dollars.  
   • Since you’re paying over 10 months, divide that by 10: 50 / 10 = 5 dollars per month.
2. Add the interest to the principal:
   • You borrowed 1000 dollars, and you’ll pay 5 dollars in interest each month.
   • So, each month, you’ll pay 1000 + 5 = 1005 dollars.

This is a very simple example. Real-world loans often have more complex interest calculations and fees.

If you are looking for loan, then please check below:

Personal Loan Process and Banks in the UAE – Rohitashva Singhvi

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