Need A Financial Product Forums Trading/Investments Will I get huge 24% annual interest by lending

This topic contains 1 reply, has 2 voices, and was last updated by  Vikas Biyani 2 years, 8 months ago.

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  • #46911

    Vikas Biyani
    Member

    I met across a financier who charges Rs. 2 monthly for every Rs. 100 lend. He loaned Rs. 1,00,000 to my friend. That is my friend will pay .02 * 100000 = Rs. 2,000 monthly. With this logic, if I lend Rs. 10,00,000, will I get Rs. 20,000 monthly? Which kind of interest is this?

    #46912

    Avni Kothari
    Member

    Your logic is absolutely correct. This is simple interest calculation. One month interest will be Rs. 20,000 for a loan of Rs. 10, 00,000 and yearly interest will be Rs. 2,40,000, i.e. you will get 24% rate of interest annually or 2% per month.

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