# simple interest

Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.
Related to simple interest: compound interest

## Simple interest

Interest calculated as a simple percentage of the original principal amount. Compare to compound interest.

## Simple Interest

Interest that does not compound. That is, simple interest is a percentage of the principal amount and is not added to the principal itself. For example, if one buys a \$1000 bond that pays a 2% coupon in simple interest, one receives \$20 each coupon date. The \$20 is never added to the \$1000. See also: Compound interest.

## simple interest

The interest that is paid on an initial investment only. Simple interest is calculated multiplying the investment principal times the annual rate of interest times the number of years involved. Compare compound interest.

## Simple interest.

If you earn simple interest on money you deposit in a bank or use to purchase a certificate of deposit (CD), the interest is figured on the amount of your principal alone.

For example, if you had \$1,000 in an account that paid 5% simple interest for five years, you'd earn \$50 a year (\$1,000 x .05 = \$50) and have \$1,250 at the end of five years.

In contrast, if you had been earning compound interest, you'd have \$1,276.29 at the end of five years, since the interest you earned each year, as well as your principal, would have earned interest.

see INTEREST.

## simple interest

the INTEREST on a LOAN that is based only on the original amount of the loan. This means that, over time, interest charges grow in a linear fashion. For example, a £100 loan earning simple interest of 10% per annum would accumulate to £110 at the end of the first year and £120 at the end of the second year, etc. Compare COMPOUND INTEREST.

## simple interest

Interest on the principal balance of a loan or debt,but without compounding due to also charging interest on past-due and unpaid interest.

## Simple Interest

A transaction in which interest is not paid on interest— there is no compounding.

For example, if you deposit \$1,000 in an account that pays 5% a year simple interest, you would receive \$50 interest in year one and another \$50 in year two. If interest were compounded annually, you would receive \$52.50 in year two.

All deposit accounts compound interest, however, because if they didn't, depositors would shuffle accounts between banks. In my example, you could withdraw the \$1050 at the end of year one, put it into another bank, and earn \$52.50 in year two.

References in periodicals archive ?
This suggestion was consistent with an earlier British Columbia Supreme Court (BCSC) decision in Kwan vKinsey, where, as in Gill, the rogue held the fee simple interest and therefore did not hold indefeasible title.
However, it was less clear, particularly in the aftermath of the 2005 LTA amendments, whether the presumption in favour of the validity of a registered charge could withstand the inability of the registered holder of the fee simple interest to establish indefeasible title because he or she had participated in fraud.
Justice Barrow's trial court decision in Gill v Bucholtz offered the first sustained judicial analysis of the status of a charge derived from the registered holder of a fee simple interest who is on title because of fraud and therefore does not enjoy indefeasible title.
Interest from 7/1/75 thru 1/31/76: Simple interest - "month-day" method 9%
Interest from 2/1/76 thru 1/31/78: Simple interest - "month-day" method 7%
Interest from 2/1/78 thru 1/31/80: Simple interest - "month-day" method 6%
Structurally, these clubs have divided property rights; the owner of the fee simple interest has divided this interest by granting certain property rights to others, the members.
Therefore, the buyer effectively receives the undivided fee simple interest in the property, and the valuation begins with a full highest and best use analysis, as if vacant, as discussed for equity clubs.
Before selling any memberships, the owner of such a new facility would first hold the fee simple interest.
Once the construction has been completed but before occupancy of the space, the question becomes what is the value of the fee simple interest in the real property.
The appropriate method to estimate the value of the real estate, then, is clearly to disregard the contractual arrangements affecting the property and estimate the value of the fee simple interest in the real property as illustrated in Table 3.
Rents for the going-concern versus rents for the fee simple interest in the real property

Site: Follow: Share:
Open / Close