Interest or the interest of money is given remuneration of the debtor to the creditor on capital loaned.
Capital or loans is an amount of money borrowed from the debtor’s creditors for a certain period by giving rewards in the form of flowers.
Debtors are people or institutions that borrow some money or take loans from banks or financial institutions.
Creditors are people or institutions that make loans or provide credit.
Any entrepreneur who will start businesses, develop business, or increase business capital, would require some money. The money can be obtained by borrowing money to someone else, take out a loan to the bank, or apply for loans to other financial institutions. In return for the loan, the entrepreneur will provide remuneration in the form of money called interest or the interest money.
The calculation of interest is usually in percent per year.
Interest can be calculated using the following formula.
a. The formula to calculate interest daily, interest = MxLxP: 100×360
b. The formula to calculate interest on a monthly basis, interest = MxLxP: 100×12
c. The formula to calculate the annual interest rate, interest rate = MxLxP: 100
M is the capital borrowed or planted.
L is the length of that borrowed capital or planted.
P is the percent interest a year.
Terms of calculation of interest is as follows.
1. Day delivery of capital earn interest, while the day of return does not earn interest.
2. Calculation of day rates can be calculated according to the actual day (according to the calendar) and can also be determined each month has 30 days.
3. 360 days a year set interest rates.