For example, you’d love it if your credit card used simple interest to calculate your balance instead of compound interest! Likewise, you probably don’t want to be too heavily invested in bonds that ...

Reviewed by Caitlin Clarke Fact checked by Suzanne Kvilhaug Simple Interest vs. Compound Interest: An Overview Interest is the amount of money you must pay to borrow money in addition to the loan ...

A simple interest loan calculates interest based only on the principal. Learn how it works, get examples and weigh the pros and cons.

Simple interest works in your favor when you borrow money, while compound interest is better for you as an investor.

In this article, we’ll define simple and compound interest, with examples of each and ways to reap the benefits of compound interest. What is simple interest?

Interest on an account can be calculated as simple or compound interest. Find out what simple interest means and how it affects your investment.

In real-life situations, simple interest works in your favor when you're a borrower but against you when you're an investor.

The formula for simple interest is principal times the interest rate times the period. Usually period is expressed as a fraction of 12. For example, one month of interest will be 1/12.

Simple interest is based on the principal amount of a loan, while compound interest is based on the principal plus accumulated interest. Learn more in our guide.