Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Principal is the amount you borrowed, and interest is the amount you pay to the lender as a charge for borrowing. To calculate interest, multiply the principal amount by the interest rate, then ...

Simple interest is paid only on the principal, e.g., a $10,000 investment at 5% yields $500 annually. Compound interest accumulates on both principal and past interest, increasing total returns over ...

Calculating the interest rate on a personal loan can be difficult. Most lenders use simple interest rather than compound interest, though, which makes the job a little easier. To calculate how much ...