Simple interest, that is, interest is calculated only according to the original capital, that is, interest is calculated according to the fixed principal, but interest generated by the principal is no longer calculated. If the investor's principal is 10000 yuan, 2% interest will be generated every year. According to simple interest, 200 yuan interest will be generated only on the basis of the principal every year.

Annual interest rate simple interest refers to the interest rate discounted to the whole year through the inherent rate of return of products. The annualized loan interest rate is calculated by the ratio of all loan fees charged by the borrower to the loan principal actually occupied by the borrower.

In adult form, whether the annualized loan interest rate is calculated by compound interest method or simple interest method, and if it is calculated by simple interest method, it is simple interest. Simple interest means that no matter how long the deposit period of the fund is, only the principal interest is calculated, and the interest of previous periods is not calculated in the next interest-bearing period.

Second, what are simple interest and compound interest?

Main differences:

1. Simple interest: interest is only calculated according to the original amount, and interest is not included in the principal interest. That is, interest does not generate interest, that is, the principal is fixed, and the interest is settled in one lump sum after maturity, and the interest generated by the principal is no longer calculated.

2. Compound interest: the calculation of compound interest is based on the principal and interest it generates. Compound interest is actually compound interest, that is, the principal and interest of the previous period are used as the principal of the next period to calculate interest.

For example:

Deposit 10000 yuan for 2 years, with an annual interest rate of 3.25%; After 2 years, the interest is:

1, simple interest calculation method: 100003.25%2=650 yuan;

2. Calculation method of compound interest:

100003.25% 2100003.25% 3.25% = 650 yuan 2 1. 125 yuan;

Where100003.25% 3.25% = 21.125 yuan is the interest for the first year.

100003.25% interest generated in the second year, that is, interest of interest.

3. What do you mean by simple interest and compound interest?

Simple interest and compound interest on a loan means that the loan collects interest in the form of simple interest or compound interest. Simple interest means that no matter how long the deposit period of the fund is, only the interest of the principal is charged, and the interest of previous periods is not charged in the next interest period. Compound interest means that when calculating interest, the total interest accumulated in the previous period is added to the principal to calculate the interest of a certain interest period, which is also commonly known as "interest means interest" and "rolling interest". Interest refers to the remuneration paid by the borrower to the lender in order to obtain the right to use the funds, which is the use price of the funds in a certain period (that is, the loan principal). The loan interest can be calculated in detail by the loan interest calculator. In civil law, interest is the legal fruit of principal. Loan repayment method: equal principal and interest repayment method: equal monthly repayment, repayment of loan principal and interest. Most banks have adopted this method for housing provident fund loans and commercial personal housing loans. So the monthly repayment amount is the same. Average capital repayment method: that is, the borrower repays the loan in every installment (month) during the whole repayment period, and at the same time pays off the loan interest from the previous trading day to the repayment date. In this way, the monthly repayment amount decreases month by month.

4. Which is better, simple loan interest or compound interest?

The personal housing loan interest of China Construction Bank is compound interest.

In essence, loan interest is compound interest, not simple compound interest;

(2) that is, part of the monthly repayment is interest and part is principal. When calculating interest next month, first calculate the principal balance, directly multiply it by the monthly interest rate to get the interest payable this month, and then use the monthly payment-the interest payable this month is the principal amount repaid this month, and so on.

Transaction interest method:

(1) According to the predetermined interest calculation formula, interest = principal interest, with three details:

If the interest-bearing period is a whole year (month), the interest-bearing formula is as follows: ① Interest = principal× whole year (month) and odd-numbered days, and the interest-bearing formula is as follows: ② Interest = principal× number of years (months )× annual (month) interest rate principal× odd-numbered days interest rate. At the same time, banks can choose to convert the interest period into actual days to calculate interest, that is, 365 days per year.

If the bank loan is within the agreed repayment period, if it is overdue, compound interest will be calculated on the overdue loan.

The ratio of interest amount to principal amount.

The interest rate in China can fluctuate within the basic range with reference to the loan interest rate of China Bank and the international contract interest rate of China.

Loans with banks and other financial institutions as lenders may be negotiated with the People's Bank of China. If the loan interest rate is high, it will be low after the loan expires.

Simple interest refers to the interest calculated according to the fixed principal, which is a method of calculating interest. Simple interest or loan amount (the length of principal and the general market interest rate level and other factors. The interest on the bank deposit is the bill.

Compound interest is a method of calculating interest. According to the principal, the newly obtained interest can still bear interest, so it is vulgar and profitable. As long as the interest is calculated faster, the compound interest effect will be more obvious with the longer the term.

Compound interest calculation formula: it is to calculate the interest in the previous period. There are two main calculation methods: one is to calculate compound interest at one time; The other is the calculation of equal multiple payment of compound interest. Compound interest calculation includes intermittent compound interest and continuous compound interest, such as half a year, quarter, month or day); The calculation method of instant compound interest is continuous compound interest. In practical application, intermittent compound interest is generally used, which is characterized by taking the sum of the principal and interest at the end of the previous period as the principal of the next period, and calculating the final value of the principal and interest of multiple equal investments in the process of calculating the principal of each period.