simple interest

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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.

simple 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 ?
But what if the registered holder of the fee simple interest did not, because of fraud, enjoy indefeasible title?
The "month-day" method of computing interest was well suited to the computation of interest when the interest rate was six-percent simple interest and when computers were not available to assist in the computation.
The central bank had sold TRY1bn at an average simple interest rate of seven percent at the last repo held on Wednesday, the report noted.
The 100% fee simple interest was appraised by a real property appraiser at $1,096,000 as of the date of transfer.
The simple interest was 9.39 percent, composite interest was 9.61 percent and maturity date was January 15, 2020 in the auction.
A common example is in the valuation of the fee simple interest in a nonprofit equity club, for many encounter difficulty applying the income approach to a property with no income.
65.25 crores payable in 12 equal monthly installments with simple interest @ 10.00% p.a.
The simple interest rate was 9.05 percent and composite interest was 9.36 percent in today's auction.
The only difference is that the term real estate refers to the physical entity and the term real property refers to the legal entity.(6) The terms real property (described for emphasis throughout this article as the fee simple interest in the real property) and real estate are therefore used interchangeably in various sections of this article.
The City of Irving is requesting proposals from various interested companies to provide appraisal services related to the purchase of fee simple interest in this property to accommodate the expansion of Heritage Park in Irving s downtown district.
Rockwood Real Estate Advisors represented the seller of the 100 percent fee simple interest in One Campus Drive, a 3-story, 377,000 s/f office building previously occupied by Realogy Holdings Corporation, which was awarded Jersey tax incentives to stay in the state and is relocating to a new Hampshire Companies facility in Madison, NJ.
The composite interest was 8.95 percent, and the simple interest was 9.24 percent in the auction.

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