Private lending interest rate question

[Joel Johnson]

Hello guys and gals, When you borrow money from another person (private money) and use an assigned interest rate, say 10%, how is the interest computed? 10% for the term of the loan? So, let's say you set up $100,000 of financing for 13 months at 10%, but pay it back in 12 months. Would you compute the interest by ($100,000 * .10 = $10,000) / 13 = $769/month. Then $769 * 12 to get your total interest due of $9,228? Or is it all based on an annual percentage rate no matter the term. So, Interest Rate * Loan Amount / 12 * #months the terms defined? Clear as mud? Thanks for your help understanding this. Someone close to us has offered $200,000 of capital, to use short term...trying to figure this out. Thank you! J&B