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

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 • May 6, 2020

Interest is calculated as simple interest or compound interest.

From Textbooks • May 6, 2020

Some of these funds, although received in 1647, were not paid over to the treasury of the College until 1713; then, indeed, the College received an allowance of simple interest for the delay.

From The Atlantic Monthly, Volume 18, No. 107, September, 1866 by Various