Simple Interest

What is Simple Interest?

Interest is the fee paid by a borrower for the use of a lenders money. Simple interest is interest calculated on the balance of the original loan amount.

Simple Interest Formula

The formula for simple interest calculated on an annual basis is

Simple interest = Loan x Annual interest rate x number of years

For further information on simple interest see the Wikipedia definition.

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Last modified March 23rd, 2016 by Team

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