Interest is computed by applying the annual percentage rate to the outstanding loan balance under the

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The simple interest method is the most common way of computing interest on a loan. It applies the annual percentage rate (APR) to the outstanding loan balance on a daily, weekly, or monthly basis, depending on the loan terms. This method does not compound interest, which means that interest is only charged on the original principal amount of the loan, not on any interest that has accrued.

Interest Is Computed by Applying the Annual Percentage Rate to the Outstanding