Simple interest

    Simple Interest

    Investment Planning

    Interest calculated only on the principal amount. Unlike compound interest, it doesn't earn interest on accumulated interest.

    Formula

    A = P(1 + rt)

    Why it matters

    Used in some short-term deposits and loans. Less beneficial for savers compared to compound interest.

    Indian example

    Related terms

    Compound interestPrincipalInterest Rate

    Learn the concept

    Time value of money →

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