Noun1.simple interest- interest paid on the principal alone interest- a fixed charge for borrowing money; usually a percentage of the amount borrowed; "how much interest do you pay on your mortgage?" Based on WordNet 3.0, Farlex clipart collection. © 2003-2012 Princeton University, Farlex...
The meaning of SIMPLE INTEREST is interest paid or computed on the original principal only of a loan or on the amount of an account.
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Interest calculated as a percent of the original loan. Example: a 3-year loan of $1,000 at 10% costs 3 lots of 10% So the interest is 3 × $1,000 × 10% = $300 (Simple interest is almost never used in the real world, with compound interest being preferred.)See...
Simple interestis always based on the principal balance (original deposit). Compound interest is based on the principal balance and the interest that’s added each time compounding occurs. The formula for simple interest is: Mortgages and auto loans are examples where simple interest is used instea...
Using the formula {eq}I=PRT {/eq}, we can calculate the simple interest as: Simple Interest Example How to Find Rate in Simple Interest Formula The simple interest formula can also be used to solve for the rate or the time. There are four parts to the simple interest formula: interest...
Interest is defined as the cost of borrowing money. It can also be the rate paid for money on deposit, as in the case of a certificate of deposit. Interest can be calculated in two ways: simple interest or compound interest. Simple interest is calculated on the principal, or original, ...
I = Simple interest, dollars P = Principle, dollars i = Interest rate per time period n = Number of time periods of loan In the above formula, it is essential that the time periods foriand n be consistent with each other. That is, ifiis expressed as a percentage per year,nshould be...
Simple Interest vs. Compound Interest Two main types of interest can be applied to loans—simpleandcompound. Simple interest is a set rate on the principal originally lent to the borrower that the borrower has to pay for the ability to use the money. Compound interest is interest on both the...
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