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

Sean’s new car loan statement said he would pay $4,866.25 in interest from a simple interest rate of 8.5% over five years.

From Textbooks • Sep. 23, 2020

In 10 years, a bank account that paid 5.25% simple interest earned $18,375 interest.

From Textbooks • May 6, 2020

We have used the simple interest formula, I = Prt, where t represented the number of years.

From Textbooks • Apr. 22, 2020

After his death his estate paid nine years' simple interest on his deficit, and ten years thereafter, the principal was paid.

From Little Journeys to the Homes of the Great - Volume 03 Little Journeys to the Homes of American Statesmen by Hubbard, Elbert