simple interest

noun

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

simple interest

noun

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

simple interest

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

Word History and Origins

Origin of simple interest¹

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

At the time, she recommended policies that would expand benefits at a 5 percent simple interest rate for her father and 5 percent for her mother.

From New York Times

Judge Michael Scott last week also ordered CLA to pay each consumer 12 percent annual simple interest starting at the time the consumer purchased a CLA product.

From Washington Times

“In most cases, simple interest is going to be perfectly adequate as a means of compensation.”

From Reuters

Explain the advantage of compound interest compared to simple interest.

From BBC