The interest rate on a loan which charges the borrowing customer only for the period of time the borrower actually has use of borrowed funds and may be derived from the formula I = Pxrxt is the:

Question

Quizplus · Accepted Answer

The simple interest rate is calculated based on the principal amount, the rate of interest, and the time period for which the money is borrowed, which matches the description and formula I = Pxrxt (where I is the interest, P is the principal amount, r is the rate of interest, and t is the time).

The Interest Rate on a Loan Which Charges the Borrowing