The loan annual interest rate of 7.2 simple interest means that the borrower only pays 1 times interest when repaying the loan, and does not calculate the compound interest of the loan. Simple interest with an annual interest rate of 7.2% means that the borrower borrows from the lender, and the annual interest rate of the loan agreed by both parties is 7.2. Not calculating compound interest means calculating interest and not calculating loan interest into principal. In other words, when a borrower borrows from a lender, it only needs to repay the loan principal and the loan interest calculated according to the loan principal and interest at maturity, and does not calculate the repeated interest.

The concept of loan interest rate

The loan interest rate refers to the ratio of interest amount to principal amount during the loan period. The interest rate in China is managed by the People's Bank of China, and the interest rate determined by the People's Bank of China is implemented after being approved by the State Council. The loan interest rate directly determines the profit distribution ratio between the borrowing enterprise and the bank, thus affecting the economic interests of both borrowers and lenders.