Identify the loan principal amount
Identify the interest rate
Identify the time period
Convert the interest rate to a decimal
Convert the time period to the same unit as the rate
Use the simple interest formula: Interest = Principal × Rate × Time
Use the compound interest formula: Total = Principal × (1 + Rate / Compounding Frequency)^(Compounding Frequency × Time)
Subtract the principal from the total to get the interest
Add any fees if you want the total cost of the loan
Check whether the loan uses simple interest or compound interest