When you borrow money, you’ll also pay interest on top of the amount you borrowed.. Interest is the money the lender gets for loaning you the money. Read Next: 5 Subtly Genius Moves All Wealthy People ...

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 ...

There are two main types of interest that you’ll have to pay when you borrow money to pay for something: compound interest or simple interest. Simple interest, as it sounds, is the simplest and the ...

Simple interest calculates earnings or payments based solely on the initial principal, while compound interest grows by calculating interest on both the principal and the accumulated interest over ...

In the real world, simple interest is rarely used. When you deposit money into an interest-bearing account, or take out a line of credit, the interest that accumulates is added to the principal, and ...