Simple Interest

Interest which is paid only on the Principal and not on the additional amount generated by previous Interest payments. A formula for computing simple interest is

$$a(t)=a(0)(1+rt),$$

where $a(t)$ is the sum of Principal and Interest at time $t$ for a constant interest rate $r$.

See also Compound Interest, Interest

References

Kellison, S. G. Theory of Interest, 2nd ed. Burr Ridge, IL: Richard D. Irwin, 1991.