### What does **simple interest** mean?

# Definitions for simple interest

sim·ple in·ter·est

#### This dictionary definitions page includes all the possible meanings, example usage and translations of the word **simple interest**.

### Princeton's WordNet

simple interestnoun

interest paid on the principal alone

### Wiktionary

simple interestnoun

interest paid only on the principal.

### Wikipedia

simple interest

In finance and economics, interest is payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum (that is, the amount borrowed), at a particular rate. It is distinct from a fee which the borrower may pay the lender or some third party. It is also distinct from dividend which is paid by a company to its shareholders (owners) from its profit or reserve, but not at a particular rate decided beforehand, rather on a pro rata basis as a share in the reward gained by risk taking entrepreneurs when the revenue earned exceeds the total costs.For example, a customer would usually pay interest to borrow from a bank, so they pay the bank an amount which is more than the amount they borrowed; or a customer may earn interest on their savings, and so they may withdraw more than they originally deposited. In the case of savings, the customer is the lender, and the bank plays the role of the borrower. Interest differs from profit, in that interest is received by a lender, whereas profit is received by the owner of an asset, investment or enterprise. (Interest may be part or the whole of the profit on an investment, but the two concepts are distinct from each other from an accounting perspective.) The rate of interest is equal to the interest amount paid or received over a particular period divided by the principal sum borrowed or lent (usually expressed as a percentage). Compound interest means that interest is earned on prior interest in addition to the principal. Due to compounding, the total amount of debt grows exponentially, and its mathematical study led to the discovery of the number e. In practice, interest is most often calculated on a daily, monthly, or yearly basis, and its impact is influenced greatly by its compounding rate.

### ChatGPT

simple interest

Simple interest is a method of calculating the interest amount on a loan, deposit, or other financial product, wherein the interest is calculated only on the original principal amount for a specific period of time, not on the accumulated interest. It is determined by multiplying the initial amount of money (the principal), the annual interest rate, and the period (length of time) the money is invested or loaned for.

### Matched Categories

### Numerology

Chaldean Numerology

The numerical value of simple interest in Chaldean Numerology is:

**8**Pythagorean Numerology

The numerical value of simple interest in Pythagorean Numerology is:

**4**

## Translations for **simple interest**

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"simple interest." *Definitions.net.* STANDS4 LLC, 2024. Web. 14 Apr. 2024. <https://www.definitions.net/definition/simple+interest>.

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