Simple interest


 

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Simple interest

Interest, normally paid annually, which is earned on deposited capital only. Unlike compound interest, the annual interest is not added to the capital. For example, if the capital deposited is £1,000 and the interest rate is £80, you would receive £80 at the end of the first year and at the end of the second year. This contrasts with compound interest, where the £80 interest earned on the first year would be added to the original capital, and the amount of money earning interest in the second year would be £1,080.00.

Simple interest

Interest calculated as a simple percentage of the original principal amount. Compare to compound interest.



Simple interest

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Further Suggestions

Incidence of interest calculation
Daily interest
Amortizing interest rate swap
Market interest rate
Equilibrium rate of interest
Earnings before interest and, taxes (EBIT)
compound interest
reversionary interest
Noninterest bearing note
Interest rate
Earnings before interest, taxes, depreciation, and amortization (EBITDA)
Discount Interest
Covered interest rate
Interest
Earnings before interest after taxes (EBIAT)
Interest tax shield
Covered interest arbitrage
Term structure of interest rates
Compound interest
Interest sensitive insurance policy
And interest
Covered interest parity
Interest rate parity line (IRP)
Add on Interest
Variable interest rate


 
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