Answer:
See below
Step-by-step explanation:
An interest rate is basically a percentage of principal charged by the lender for the use of its money, and it is paid via simple interest (usually in an annual period). That principal is the amount of money loaned.
For example, you may have seen a 1.5% annual interest rate, or something like that. This means that if your principal was $5000, let's say, you would have to pay $5000 * 0.015 = $75 in interest per year.
