simple interest
Definition
Interest computed only on the principal and (unlike compound interest) not on principal plus interest earned or incurred in the previous period(s). Simple interest is used commonly in variable rate consumer lending and in mortgage loans where a borrower pays interest only on funds used. Formula: Principal amount x Annual interest rate x Number of years.
simple interest is in the Accounting & Auditing, Banking, Commerce & Finance and Investing subjects.
simple interest appears in the definitions of the following terms: interest, compound interest and truth in savings
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