On the surface, an interest rate is just a number. How that number applies to debt or equity opens up a world of possibilities. The first consideration is always whether it’s simple interest vs.

Simple interest is paid only on the principal of an investment or loan. Compound interest is calculated on both the initial principal and accumulated interest. Over time, compound interest generally ...

Whether you are paying interest or being paid interest, it's important to fully understand how that interest is calculated. There are two basic types of interest: simple and compound. How each type is ...

Source: Flickr user Dafne Cholet. Simple interest refers to interest that's calculated solely based on the principal, and not any interest that has already accrued. The general formula for computing ...

The simple interest formula is Interest = P * R * T. Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Michael Boyle is an experienced financial ...

If you’re an investor looking to understand the benefits of compound interest, consider the example set by the legendary Warren Buffett. The 93-year-old’s net worth has grown to $137 billion over the ...

Interest is the amount of money you must pay to borrow money in addition to the loan's principal. It's also the amount you are paid over time when you deposit money in a savings account or certificate ...

A simple interest loan calculates the interest based only on the principal you owe. It stands in contrast to a compound interest loan, which calculates interest based on principal and any outstanding ...

Steven Nickolas is a writer and has 10+ years of experience working as a consultant to retail and institutional investors. Suzanne is a content marketer, writer, and fact-checker. She holds a Bachelor ...