interest calculated as a simple percentage of the original principal amount. Compare to compound interest. Bloomberg Financial Dictionary
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The cost of borrowing, or the return on lending money. It is calculated on the amount borrowed or lent (the principal), the length of time the funds are borrowed for, and the market general interest rate level.
► See also Compound Interest.
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simple interest UK US noun [U] FINANCE
► interest that is calculated only on the amount of money invested or borrowed and not on the interest that has already been added to it: »
If you borrow $1,000 at 12% per annum simple interest without paying back any capital, the interest is $120 at the end of each and every year.
Financial and business terms. 2012.