What does 6.8% interest actually mean?
Say I were to take out a student loan for, oh, $2000 dollars. The loan has 6.8% interest, which begins to accrue immediately, though I don’t have to make payments on it for three more years. In three years time, how much would the balance on my originally $2000 dollar loan actually be?
Is it just 6.8% interest a year? And is the interest on only the original amount, or the amount plus interest from previous years?
This question is in the General Section. Responses must be helpful and on-topic.