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

where is the sum of Principal and Interest at time for a constant interest rate .

**References**

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

© 1996-9

1999-05-26