Definition:Interest

Definition

Interest is money paid either:

by a borrower

or:

to an investor

for the use of money.

Simple Interest

Simple interest is interest which is calculated on the principal only.

Compound Interest

Compound interest is interest which is calculated by:

adding the interest which has accrued on the principal

calculating the interest on the sum

at the end of agreed conversion periods.

Also see

• Results about interest can be found here.

Sources

• 1998: David Nelson: The Penguin Dictionary of Mathematics (2nd ed.) ... (previous) ... (next): interest
• 2008: David Nelson: The Penguin Dictionary of Mathematics (4th ed.) ... (previous) ... (next): interest