SIMPLE INTEREST Definition & Meaning

simple interest

noun

interest payable only on the principal; interest that is not compounded.

simple interest

noun

interest calculated or paid on the principal alone Compare compound interest

simple interest

Interest computed only on the original principal and not on the sum of the principal plus accrued interest. The amount of simple interest remains constant.
Compare compound interest

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�y��vlog History and Origins

Origin of simple interest¹

First recorded in 1790–1800

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Example Sentences

Examples have not been reviewed.

To understand how compound interest works, let’s look at another kind of interest: simple interest.

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At the time, she recommended policies that would expand benefits at a 5 percent simple interest rate for her father and 5 percent for her mother.

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Judge Michael Scott last week also ordered CLA to pay each consumer 12 percent annual simple interest starting at the time the consumer purchased a CLA product.

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“In most cases, simple interest is going to be perfectly adequate as a means of compensation.”

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Explain the advantage of compound interest compared to simple interest.

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