simple interest

American  

noun

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

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simple interest British  

noun

1. interest calculated or paid on the principal alone Compare compound interest

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simple interest Scientific  

1. 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.

2. Compare compound interest

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Etymology

Origin of simple interest

First recorded in 1790–1800

Example Sentences

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

From Seattle Times • Aug. 1, 2022

Terrence deposited $5,720 in a bank account that earned simple interest at an interest rate of 6%.

From Textbooks • May 6, 2020

Areli invested a principal of $950 in her bank account that earned simple interest at an interest rate of 3%.

From Textbooks • May 6, 2020

We can also use the mixture model to solve investment problems using simple interest.

From Textbooks • Apr. 22, 2020

They should not include the technique of customs which are vanishing from efficient practice, such as simple interest on amount for times longer than a year, days of grace, or extremes and means in proportions.

From The Psychology of Arithmetic by Thorndike, Edward L. (Edward Lee)