Simple Interest
/ˈsɪmpəl ˈɪntrəst/
Definitions
- (n.) Interest calculated solely on the principal amount of a loan or deposit, without compounding.
The contract specified that the borrower would pay simple interest at an annual rate of 5%.
Forms
- simple interest
Related terms
See also
Commentary
Simple interest is often contrasted with compound interest; clarity in drafting loan terms regarding the method of interest calculation is crucial.
This glossary is for general informational and educational purposes only. Definitions are jurisdiction-agnostic but reflect terminology and concepts primarily drawn from English and American legal traditions. Nothing herein constitutes legal advice or creates a lawyer-client relationship. Users should consult qualified counsel for advice on specific matters or jurisdictions.