simple interest

American  

noun

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

---

simple interest British  

noun

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

---

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

---

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

Carleen deposited $16,400 in a bank account that earned simple interest at an interest rate of 3.9% How much interest was earned in eight years?

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

Robin deposited $31,000 in a bank account that earned simple interest at an interest rate of 5.2%.

From Textbooks • May 6, 2020

The mill and its contents earn for their operator nothing but simple interest on the money they have cost.

From Essentials of Economic Theory As Applied to Modern Problems of Industry and Public Policy by Clark, John Bates