posted by delphine .
a friend barrowed $5,000.00. I charged him 12 percent intrest. he paid it off over a 10 month period. Now what is the intrest total that he owes me? I thought I had it figured out and he said it not right.
If this were a simple interest problem without regular monthly payments and late penalties, the interest due after ten months would be
(10/12)*0.12*5000 = $500.00
Most lenders do not do business that way. They want monthly payments of interest due and part of principal to eventually amortize (pay off) the loan, and huge penalties if you do not comply.
so does it make a dif on the total intrest he owes me if he makes monthly payments? he made monthly payments ut they were not always the same.