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 ...

Simple interest is more favorable for borrowers due to its non-compounding nature. Compound interest benefits investors by allowing earnings to also generate returns. Invest in avenues like stocks ...

Elvis Picardo is a regular contributor to Investopedia and has 25+ years of experience as a portfolio manager with diverse capital markets experience. Suzanne is a content marketer, writer, and ...

Greg DePersio has 13+ years of professional experience in sales and SEO and 3+ years as a writer and editor. Simple interest is calculated only on the principal balance of the loan each period.