Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Suzanne is a content marketer, writer, and ...

A simple interest loan calculates the interest based only on the principal you owe. It stands in contrast to a compound interest loan, which calculates interest based on principal and any outstanding ...

There are two main types of interest that you’ll have to pay when you borrow money to pay for something: compound interest or simple interest. Simple interest, as it sounds, is the simplest and the ...

Whether you are paying interest or being paid interest, it's important to fully understand how that interest is calculated. There are two basic types of interest: simple and compound. How each type is ...

Affiliate links for the products on this page are from partners that compensate us and terms apply to offers listed (see our advertiser disclosure with our list of partners for more details). However, ...

Simple interest calculates earnings or payments based solely on the initial principal, while compound interest grows by calculating interest on both the principal and the accumulated interest over ...

Steven Nickolas is a writer and has 10+ years of experience working as a consultant to retail and institutional investors. Suzanne is a content marketer, writer, and fact-checker. She holds a Bachelor ...

Simple interest is paid only on the principal, e.g., a $10,000 investment at 5% yields $500 annually. Compound interest accumulates on both principal and past interest, increasing total returns over ...

On the surface, an interest rate is just a number. How that number applies to debt or equity opens up a world of possibilities. The first consideration is always whether it’s simple interest vs.