Answer:
The effective interest rate times the amount of the debt outstanding during the interest period.
Explanation:
Interest expense refers to the amount of money that is paid on the borrowing amount at a particular interest rate. If a person borrow some amount of money from the bank then he have to pay interest on the borrowing amount for a particular time period.
For example:
Borrowing amount = $10,000
Interest rate = 10%
Simple interest = Principle amount × Interest rate
= $10,000 × 0.1
= $1,000
