# simple interest

simple interest interest computed on principal alone, and not on principal plus interest

## simple interest

noun

Interest paid only on the original principal, not on the interest accrued.

## simple-interest

## simple interest - Investment & Finance Definition

Interest that is paid only on the original principal or on the amount originally borrowed. Interest earned or interest charges are not included in future calculations. Because of this, the amount of interest earned, or owed, in the case of a loan, will be less than with a calculation that uses compound interest. See also compound interest.