Interest calculated as a percent of the original loan.

Example: a 3-year loan of $1,000 at 10% costs 3 lots of 10%

So the interest is 3 × $1,000 × 10% = $300

Example: a 3-year loan of $1,000 at 10% costs 3 lots of 10%

So the interest is 3 × $1,000 × 10% = $300

See: Compound Interest